By David Jacobs | The Center Square
Louisiana lawmakers on Monday began discussing measures meant to help the state’s economy recover from the COVID-19 pandemic’s fallout.
Legislative leaders created the Louisiana Economic Recovery Task Force, which is supporting many of the same measures business advocates wanted prior to the pandemic. Examples include simplifying the sales tax base and creating a unified sales tax collector, cutting taxes and reducing regulation, replacing the property tax break program for industrial investment with a “more streamlined, simple framework,” and making business-friendly changes to the state’s legal system.
The Task Force’s “Phase 1” report also calls for protecting businesses not guilty of “gross negligence or willful misconduct” from COVID-19-related lawsuits and warns against placing unfunded mandates on businesses, such as requirements to purchase personal protective equipment. Federal funding should pay for PPE and to help child care centers, and all government fees on business should be suspended, the task force argues.
The task force also says the state should take steps toward holding a constitutional convention with an eye toward tax and spending reform. Most of the recommendations can be enacted through bills currently up for debate in the current legislative session or by executive action.
“The task force believes the recommendations contained in this report represent the first step in jump-starting Louisiana’s economy and setting our state on a trajectory of growth,” the report’s executive summary says.
Following an introduction by state House of Representatives Speaker Clay Schexnayder and state Senate President Page Cortez, the House Ways and Means Committee advanced a task force-supported resolution that would suspend severance taxes on oil and natural gas for a year. The state collects the tax and shares a portion with local governments.
Rep Stuart Bishop, the Lafayette Republican who chairs the committee, described it as a way to preserve an industry hit hard by low prices and weak demand.
“It’s trying to put the legs back under the backbone of our communities,” Bishop said.
A legislative staff estimate indicates the change would cause state government to forego almost $700 million, though lawmakers noted that number was based on much higher oil prices and said a new estimate would be created.
But some committee members said they worried about the impact on state and local governments, regardless of the number. Guy Cormier, who directs the Police Jury Association of Louisiana, said the change could bankrupt district attorneys’ offices and at least one parish government.
Edgar Cage with Together Louisiana, which often is critical of industrial tax breaks, said the Revenue Estimating Conference that will meet on Monday likely will give lawmakers bad news about how much money they will have to spend next fiscal year.
“Let’s not make it worse,” Cage said.
Cormier said he knew the resolution would get out of committee, given that it is the chairman’s bill, but urged lawmakers to at least maintain a portion of the tax to protect local budgets. Bishop said he would be open to making that change before the measure got to the House floor, as well as a trigger mechanism that would eliminate the tax break if the price of oil reached a certain level.
“I will work with the locals to make sure they’re covered,” Bishop said.