NEW ORLEANS – At a statewide media briefing organized by Louisiana Economic Development (LED), Louisiana Department of Revenue Secretary Richard Nelson and LED Secretary Susan Bonnett Bourgeois voiced their support for the proposed Amendment 2 to the Louisiana Constitution. The amendment, set for a vote on March 29, seeks to introduce sweeping tax reforms and fiscal policy changes.
“Economic development requires a whole-of-government approach," said Bourgeois. "This reform is part of it. So much of LED’s role is changing the narrative, positioning Louisiana to win. This is one of those critical steps."
Nelson emphasized the extensive effort that has gone into drafting the proposal in consultation with Louisiana residents and businesses. “This has been an accumulation of a year’s worth of work. It is as important as it is complicated,” said Nelson. “We’ve assembled pieces from the last couple of decades, including PAR guidelines and study after study that show that, for Louisiana to be successful, we need to make these changes.”
Rather than introduce the changes one by one in a series of amendments, the government has opted for an all-in-one approach. “We could do this in a series of amendments changing one thing at a time, but this doesn’t move us where we need to be quick enough,” said Nelson. “The constitution gives us the authority to rewrite an article all at once, so that’s what we decided to do. We packaged it all together.”
The amendment includes multiple provisions, notably reducing the maximum income tax rate from 4.75% to 3.75% by capping the legislature’s ability to raise it above that threshold. This change would benefit individuals earning more than $12,500 annually, as their tax rate would decrease from higher brackets to 3%. However, those earning $12,500 or less, currently taxed at 1.85%, would experience a tax increase under this flat rate.
Additionally, the amendment seeks to double the tax-free income threshold for seniors to $25,000, which Nelson described as a move to correct past policies that were “harmful” and to help attract retirees to Louisiana.
Another critical aspect of the amendment is its requirement for a two-thirds vote for tax exemptions, which Nelson argues is necessary to maintain Louisiana’s competitiveness after lowering tax rates. The amendment also includes a growth limit provision, setting aside revenue for infrastructure funding and tax reductions.
“We took the opportunity based on PAR recommendations to adjust two savings accounts—the Budget Stabilization Fund and the Revenue Stabilization Fund—redirecting tax revenue into the general fund so the legislature can use it,” said Nelson. “It’s one of the best emergency funds in the country.”
Current law ties deposits into these funds to specific revenue sources while amendment 2 would provide greater flexibility to redirect them into the general fund for broader spending.
Nelson talked about the education funding initiative aimed at addressing Louisiana’s longstanding teacher retirement debt, which he estimated at $8 billion. Under Amendment 2, approximately $2 billion would be drawn from several education trust funds to pay down this debt. That reduction is expected to lower annual obligations by about $300 million resulting in roughly $1 billion in interest savings over time.
“The amendment redirects $300 million from trust funds toward reducing this debt while also securing a permanent teacher pay raise of at least $2,000,” said Nelson. “This change will save about $1 billion in interest. Restructuring the funds would free up additional money for higher education of around $86 million annually.”
Bourgeois echoed Nelson’s views, emphasizing the importance of the amendment in Louisiana’s economic growth. “When companies look at investing here, either by expanding existing facilities or building new locations, there are always two critical things they look at first: the cost of doing business in Louisiana and the ease of doing business here," said Bourgeois. "The cost of doing business is always the first, most important thing."
Amendment 2 will help Louisiana become more competitive in attracting the sorts of businesses that create jobs and propel the economy forward. "This piece of legislation is important for Louisiana,” said Bourgeois.
Bourgeois also specifically pointed to the proposed elimination of the inventory tax, which she called “wildly uncompetitive” and which Nelson called “the most punishing one we have, especially for rural parishes.” Each of Louisiana’s 64 parishes, which have a variety of different priorities, will have the ability to decide whether to retain the inventory tax.
“Every parish can make their decision on the inventory tax,” said Bourgeois. “But the amendment will elevate Louisiana’s competitive standing, making the state a more attractive destination for business investment. If it passes, it will put Louisiana much higher up on the map. The interest in Louisiana is palpable. The amendment would allow us to show our competitive advantage.”
With the March 29 vote approaching, proponents argue that Amendment 2 is essential for modernizing Louisiana’s tax structure and improving its long-term economic outlook. Opponents, however, have raised concerns about potential funding losses for critical services and the amendment’s broad scope. A lawsuit has already been filed challenging the ballot language, arguing it may not fully represent the breadth of changes proposed.
