Wednesday, June 19, 2024

Lawmakers advance more tax breaks and subsidies

by BIZ Magazine

By David Jacobs | The Center Square

Louisiana lawmakers advanced more tax breaks and incentives Monday while raising concerns about whether the costs outweighed the benefits.

“Nobody takes lightly having to cut things out of the budget, or takes lightly having to raise taxes,” said Sen. Bret Allain, the Republican Revenue and Fiscal Affairs chairman. “As we continue rolling all these credits out here, we really need to be cognizant of what’s going to come next year.”

The House Ways and Means Committee moved along two bills meant to promote access to high-speed internet service. House Bill 68 would create a $500 tax credit per structure for providing broadband service, while House Bill 69 would create a sales tax exemption for fiber optic cables.

Though the federal government is preparing to spend $16 billion to promote broadband access in unserved areas, that’s not nearly enough money to fix the nationwide access problem, said Rep. Daryl Deshotel, an Avoyelles Parish Republican and fiber network consultant who sponsored both measures. The credit and tax exemption could encourage companies that benefit from the federal program to invest in Louisiana before the money runs out.

House Bill 68 in its current version would provide no more than $50 million in credits. The cost of House Bill 69 can’t be calculated without a couple years of data, Department of Revenue Secretary Kimberly Robinson said.

But supporters said providing broadband internet service to more homes and businesses could lead to job creation and higher property values, thereby creating additional tax revenue. Broadband access is the most important issue for members of the Louisiana Municipal Association, LMA Executive Counsel Karen White said.

Allain’s committee approved Senate Bill 24, which extends the life of the Angel Investor Tax Credit program (which is due to sunset next year) through 2025 and doubles the maximum amount that can be awarded in a year from $3.6 million to $7.2 million, while enhancing the credit for investments in low-income areas. It’s not a huge amount of money in $30-billion-plus state budget, Allain noted.

But the state’s hundreds of tax breaks and subsidies add up to billions of dollars, and the return on investment often is unclear.

“We need a holistic plan to realign all these things,” Allain said.

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