The Louisiana constitution says that parishes can keep 20 percent of severance taxes collections on oil and gas BUT it caps that amount at $850,000 tied to CPI-U over time. Representative Larry Bagley has filed a constitutional amendment and a proposed law to change that.
Bagley said, “For many parishes across Louisiana – including my home parish of Desoto – this is a really bad deal. DeSoto Parish has been sending tens of millions of dollars annually to the state general fund through the severance tax. Since the Haynesville Shale started in DeSoto, we’ve sent somewhere around one billion dollars to the state general fund through severance tax.” To make his point Bagley added, “The whole time, we’ve been getting to keep just $850k per year that has slowly been adjusted up with inflation over time.”
Severance tax parishes like DeSoto make a unique contribution to the state. Representative Bagley said, “It comes at a cost though, and that is to local infrastructure. Parishes like mine need to be able to take a reasonable amount of the severance tax to invest back into infrastructure. That’s what my bill does.”
In addition to DeSoto, Bagley said this measure would benefit Plaquemines, Caddo, Red River, Terrebonne, Lafourche, Bossier, Vermillion, St. Martin, St. Mary, Lincoln, Sabine, Cameron, Bienville, Beauregard, Natchitoches, Claiborne, Calcasieu, Iberia and Lasalle parishes.
Bagley has also filed a bill to require that any severance tax revenue kept by a parish in excess of the 2022-23 rates to be spent this way:
- 50 percent for the newly created site development program that we enacted last year. Parishes can spend this money themselves pursuant to that law or they can fund their respective EDOs efforts. Either way, this capitalizes a program that makes us competitive with other states for bringing in new business to Louisiana.
- 50 percent of the money would go to the respective parish for parish infrastructure.
That bill was filed in the state House of Representatives.
Bagley emphasized that the two bills would not impact taxpayers. The severance tax is already being collected by the state. What Bagley is attempting to do is give the individual parishes a larger share of the tax now being collected.