Senate should reverse House’s anti-reform stance

THIS AFTERNOON, the Senate gets back to deciding whether it’s up to the task of serious tax reform.

But across the hall, the decision has already been reached.

The House made it clear enough that it had no appetite for real tax reform when it summarily rejected all efforts earlier this year to do anything more than the most simplistic tax swap. Then last week, just to make sure no one missed the point, representatives declared that they wouldn’t let anyone outside the Legislature take a serious shot at reform either.

The funny thing is, representatives did this by way of a bill that was designed for the very purpose of getting past this legislative intransigence.

In its original form, the bill by House Speaker Bobby Harrell would have created a BRAC-style process to tackle the swamp of sales tax exemptions that are the most obvious reminder of how incoherent our state’s tax policy is. Under his proposal, a committee appointed by the Legislature and the governor would put together a list of exemptions that should be eliminated, and those exemptions would be eliminated unless the Legislature voted to keep them all.

That’s not the way the Legislature is supposed to work. In fact, it is a testament to how broken our political system is that Mr. Harrell would conclude that the only hope of ever getting tax reform past all the special interests and the political deal-making that protects them was to resort to this Washington-style abdication of responsibility. But he was probably right, which made a lot of thoughtful people hold their noses and support his approach.

Even this was too much for the House, though. Last week, representatives voted to gut Mr. Harrell’s bill and pass in its place a measure authorizing yet another committee to study the tax system; this one would be charged with recommending a list of exemptions to eliminate. The idea of setting a process in motion that stood a good chance of leading to change was so obnoxious to representatives that not one person — not even Mr. Harrell — rose to speak in its defense.

Proponents will argue that the watered-down bill can result in action; it still forbids the Legislature to amend the committee’s list of recommendations, just as the Base Realignment and Closure commission on which it is modeled does. But the House stripped out the only mechanism that could force the Legislature to consider those recommendations — and we have a very long history of ignored tax studies to suggest that this one won’t get so much as a subcommittee hearing.

There’s a lot more to tax reform than simply culling the Legislature’s most revered list of sacred cows. But tackling that list is an essential component of real reform. Even if it weren’t jammed up with unjustifiable policy, it’s too big to ignore: For every dollar in sales taxes the state collects, this list prevents 44 cents from being collected. Legislatively created exemptions such as these are one of the big reasons the sales tax is becoming an unstable funding source across the country.

With the House taking such an aggressively hands-off approach to the exemptions, some senators might consider it pointless even to consider any reform proposals that target them. Of course, that’s like saying there’s no need even to have a Senate.