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Mark Ballard: In Louisiana, does reducing taxes to create jobs hurt funding for education, roads?


September 9, 2017
By Mark Ballard
Originally Posted on The Advocate

President Donald Trump sounded like he was running for the Louisiana Legislature when he told Republican leaders last week: “We're going to reduce taxes for companies, and those companies are going to produce jobs.”

Creating jobs by any means necessary has long been the guiding principle of Louisiana politics. Legislators invoke its name to pass all manner of laws. It’s the touchstone college leaders use to argue against further cuts to their budgets.

Even candidates in the Oct. 14 election for state treasurer, a position that can legally create employment for only 54 people, promise work for the multitudes.

Gov. John Bel Edwards counts jobs to gauge the worthiness of tax breaks for companies. And he is savaged by right-wingers who say his policies hurt employment opportunities. “The economic landscape Gov. Edwards is cultivating is not one that’s open for business,” Melissa Landry, of Louisiana Lawsuit Abuse Watch, wrote in USA Today.

Critics counter that fidelity to job creation has led lawmakers to forgive so many taxes that the state is unable to raise enough money to pay for education, roads and other services.

And what has Louisiana received for these offerings left on the altar?

Not much, says Louis Reine, president of the Louisiana AFL-CIO.

“Three or four years ago they told us we’d have a boom in jobs off these tax incentives. My question is ‘Where are the jobs?’” Reine said, adding that he’s not against economic development initiatives, just that so many have been given to businesses while trained Louisiana workers find they can make far more in Texas or Alabama.

A Louisiana Budget Project report released Thursday shows Louisiana has 1.98 million jobs, 53,800 more than in December 2007. The “new jobs number” should be more than 100,000 to keep up with population growth.

“Job growth remains slow, wages are depressed and many workers are stuck in low-quality jobs,” stated the survey by the Baton Rouge-based think tank that reviews government policies with an eye on low- and middle-income families.

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The annual analysis doesn’t take a position on whether tax exemptions are good or bad, but is aimed at providing numbers to inform the debate, said Jan Moller, the Budget Project’s director.

“I think you can say a broad takeaway is that we’re investing too much on the business side and not enough in the workers,” Moller said.

Job growth has been uneven around the state, the Budget Project survey shows. Lake Charles is booming.

That’s because of a wave of multibillion dollar investments by international corporations that were enticed to build plants in southwest Louisiana, says Stephen Waguespack, who heads the Louisiana Association of Business and Industry. The Baton Rouge-based LABI, which represents companies at the State Capitol, is arguably the state’s most powerful lobbyist.

Incentives alone don’t bring businesses to Louisiana or keep them here, he said. But it’s part of a package that includes education, roads, bridges, and workers.

A favorable business atmosphere also plays a vital role, Waguespack added, and right now criticizing the business community is much in vogue.

What scares businessmen is a legal system in which businessmen are easily sued and a tax structure that constantly shifts to address budget shortfalls, usually at a cost to companies, he said. The Edwards administration, by his estimation, is relying more on criticism of businesses than addressing those issues.

Edwards’ Commissioner of Administration Jay Dardenne gives a financial status report to just about anyone who asks. A bar chart compares actual corporate income and franchise taxes collected to the amounts forgiven. In 2008, the blue-shaded columns were about even. In 2016, the column representing business tax exemptions towers like a skyscraper over a stubby one for corporate tax collections.

Edwards is reaching out to the business community in a series of statewide forums held behind closed doors, which Waguespack applauds. The governor met with a couple dozen business leaders in Houma on Thursday and another passel in Alexandria on Friday. New Orleans and Shreveport are on tap.

“Their input is critically important as these business leaders are on the front lines — creating jobs and working to build a strong economy,” Edwards said in a statement.

Waguespack, who has few good words for the Democrat, says he’s heartened to see that the governor is coming up with some sort of proposal that will drive debate. In his experience — one of Wags’ jobs for Republican Gov. Bobby Jindal was to lobby lawmakers – legislators need a blueprint to work off of, he said.

“Everyone is waiting with bated breath to see what the governor comes up with,” Waguespack said.