Tuesday, May 28, 2024

Louisiana legislative task force: Cut taxes, regulation to boost economy

by BIZ Magazine

By David Jacobs | The Center Square

A business task force assembled by Louisiana legislative leaders recommends tax cuts and incentives, legal protections, and deregulation as part of an effort to stimulate the state’s economy amid the fallout from COVID-19.

The policy wish list includes many changes business interests were seeking before the pandemic began, many of which were addressed by legislation during the regular session completed Monday or are on the agenda of this month’s special session.

“While we continue to work on slowing the spread of COVID-19, we must simultaneously work on getting Louisiana’s economy running again,” Senate President Page Cortez and House Speaker Clay Schexnayder said in an introductory letter to the report.

In broad terms, the report’s recommendations include providing direct financial assistance to small businesses and broadening eligibility for certain tax incentives, along with simplifying the tax code, investing in workforce training, and boosting tourism marketing.

Democrats raised alarms about giving out tax breaks during the regular session, noting the revenue crunch for state and local governments. But Republicans said they wanted to help the businesses that provide so much of Louisiana’s tax base, many of which were ordered by government to shut down or limit operations to help contain the spread of the new coronavirus.

“Absent having a good business climate and a good tax base we can’t provide the needed services,” Cortez said during a task force meeting.

Jan Moller, executive director of the Louisiana Budget Project, said he understands the desire to stimulate the economy, and he hopes there is more relief from the federal government, which can run deficits. Louisiana, on the other hand, must balance its budget.

“This is what you get when you only ask business, corporations and lobbyists for advice,” he said, referring to the business-dominated legislative task force. “When you start giving away tax credits, you are cutting revenue that should be helping to support people.”

Moller is part of Democratic Gov. John Bel Edwards’ Resilient Louisiana Task Force. It has the same goal as the legislative task force ­– helping the economy recover and positioning the state for long-term growth – but is more diverse in terms of the background and political orientation of its members.

Moller points to House Bill 846, a measure the legislative task force supported that already has been sent to the governor’s desk, as possibly the “worst bill of the entire [regular] session.” The bill provides rebates worth 6 percent of new payroll for restaurants, hotels and retailers impacted by COVID-19 for adding jobs over the next three years.

The benefit is limited to businesses with 50 or fewer employees, and businesses would not have to pay above minimum wage to qualify for the subsidy.

“What this bill is trying to say is, ‘Keep your doors open [and] hire people back,’” said Joel Robideaux, the legislative task force’s vice chairman who testified for the bill in committee.

But the cost to the state is open-ended, and the program will subsidize hires businesses likely would have made anyway based on their needs, said Greg Albrecht, the legislature’s chief economist.

Gov. John Bel Edwards called the business tax breaks “well-intentioned,” but said he was concerned about the impact on state revenue during a budget crunch.

“These are all things that we would like to do,” Edwards said, adding that he was shooting for “creating the right balance.”

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