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Campbell proposes ‘foreign oil tax’ to replace Louisiana's income tax

A rig and supply vessel in the Gulf of Mexico off the cost of Louisiana on April 10, 2011.
Gerald Herbert
A rig and supply vessel in the Gulf of Mexico off the cost of Louisiana on April 10, 2011.

This story was originally published by the Louisiana Illuminator.

A member of the Louisiana Public Service Commission wants Gov. Jeff Landry to eliminate the state income tax and replace it with a tax on foreign oil processed in Louisiana.

Foster Campbell, D-Bossier City, announced his “challenge” to the Republican governor on Jim Engster’s “Talk Louisiana” radio program Monday and issued a news release to that same effect later in the day.

Engster noted Lt. Gov. Billy Nungesser, another Republican, recently endorsed Campbell’s “Foreign Oil Tax” proposal, which would require an amendment to the Louisiana Constitution.

Under the current state constitution, oil and gas is not subject to taxes other than severance taxes, which are levied on natural resources extracted within Louisiana’s borders.

Campbell proposes that Landry and the Legislature create a tax on all foreign and offshore oil processed or refined in Louisiana and use the revenue to offset an elimination of the state income tax.

“The oil companies damaged our coast,” Campbell said. “It’s time for them to pay their fair share in taxes.”

As a Democrat, Campbell is an outlier for having won a fourth term in 2020 in a North Louisiana district that voted overwhelmingly for Donald Trump on the same ballot. He has managed to keep a bipartisan base of supporters without straying from liberal policies on the Public Service Commission, which regulates utility companies, energy infrastructure and pipelines, among other matters, in Louisiana.

Everyone except the petrochemical industry would support the measure, and Landry could use it to gain favor among voters and shore up his political legacy, Campbell said.

“Gov. Landry can use the revenue to eliminate the state income tax,” he said. “He’ll be remembered forever if he does this.”

The idea is not new. A number of Louisiana politicians from across the ideological spectrum have offered similar proposals through the years, but none have prevailed. The oil and gas industry has many well-entrenched lobbyists with powerful influence at the State Capitol.

However, Campbell said the timing is ripe for such an idea given Landry’s desire to hold a constitutional convention. The governor has called on state lawmakers to work with his appointees to rewrite Louisiana’s chief governing document, but he has refused to say what specifically he wants to change in the constitution, and he wants it done in just a two week period, leading some to suspect a draft has already been written in secret. The previous constitutional convention was held in 1973 and took several months to complete.

“He has the microphone right now,” Campbell said of Landry. “He has the power. He should put this in his call for the constitutional convention.”