After some haggling over a proposal to do away with all state income taxes, Louisiana Governor Bobby Jindal and lawmakers have instead agreed on an income tax break that would take effect next year.

The governor announced Wednesday that he and legislative leaders have agreed on a plan that would revert income tax brackets back to what they were before the voter-enacted Stelly Act. That was the amendment to the state constitution that changed income tax rates, did away with some deductions, and eliminated state sales taxes on food and utilities.

"What we have agreed is that we should appeal the Stelly income tax increases, effective January 1, 2009," said Governor Jindal. "Louisiana's working families, come this January first, will start to see larger paychecks, they'll start to see more savings, more dollars to go into their pockets."

Governor Bobby Jindal talks about the tax cut compromise:

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The tax cuts will go to individuals who earn between $25,000 and $50,000 per year, and coupled earning $50,000 to $100,000 per year.

After the governor's news conference, the House Ways and Means committee Wednesday afternoon approved the compromise bill by Senator Buddy Shaw. Shaw, a Shreveport Republican, had originally wanted the $300 million tax break to take effect this year. By making the break effective next year, Jindal says it won't impact the budget proposal he wants lawmakers to approve this session.

"We've said all along that we've encouraged fiscal responsibility as we cut taxes," said Jindal. "That's the way that we can continue to not only to cut taxes but sustain those tax cuts."