Here’s a bit of an inconvenient data dump for Gov. John Bel Edwards on the eve of his laughable “business summit” – which as the Louisiana GOP has been screaming all week is really nothing more than a taxpayer-funded re-election campaign stunt starring the governor’s cronies. From a press release the Louisiana Association of Business and Industry put out a few moments ago…
More than two dozen new laws permanently affect the taxes paid by small and large companies conducting business in Louisiana, ultimately leading to an additional $3 billion in state taxes over just three years. That startling statistic is one of many outlined in a summary (CLICK HERE) released today by the Louisiana Association of Business and Industry (LABI), reviewing business taxes enacted in Louisiana since 2015.
National research recently made similar findings about Louisiana’s business tax burden. A report by Ernst & Young, in conjunction with the Council On State Taxation and the State Tax Research Institute, ranked Louisiana as the top state for growth in state and local business taxes from Fiscal Year 2016 to Fiscal Year 2017 at an alarming rate of 12.5 percent. The national average was just two percent. Louisiana business taxes are now estimated at $10.1 billion annually for state and local government. The next highest Southern state was Florida at #8 with a business tax increase of 4.9 percent. Ernst & Young’s report can be downloaded from their website at www.ey.com.
“Louisiana’s complex tax structure has faced continuous change in recent years,” noted LABI’s report author, Camille Conaway, Senior Vice President. “Income taxes, franchise taxes, sales taxes, and property taxes – no element of the Louisiana business tax code has been left untouched since 2015 in an effort to boost collections. And still, the tax code is arguably the most complicated it has ever been.”
More than two dozen permanent changes were made to increase tax collections, and another half-dozen temporary changes have come and gone. One tax proposal requiring a constitutional amendment was defeated at the ballot, and another law has been declared unconstitutional by the Louisiana Supreme Court.
In addition to the detailed list of tax changes, LABI released an updated version of its annual overview of the Louisiana business tax code: “Business is Paying More than Its ‘Fair Share’ in Louisiana.” (CLICK HERE) The report highlights the fact that Louisiana businesses pay a higher share of state and local taxes (49%) than the national average (44%).
“Louisiana’s unemployment rate, economy and workforce participation levels, unfortunately, lag the rest of the nation, and the additional $3 billion in state taxes over three years has definitely been a contributing factor,” concluded LABI president and CEO Stephen Waguespack. “Instead of continuing this trend of targeting the business community to fix government’s challenges, it is time for the rhetoric and policies coming out of the state capitol to change. Our elected leaders should stop relying on increased government taxes, spending, mandates and lawsuits as the best way to provide improved economic opportunities for our people. The data clearly shows that approach is not working. Success for Louisiana businesses and families comes with more jobs, more private sector growth and more opportunities for our young people to stay here at home. LABI believes sustainable growth begins with a stable, competitive business tax climate, a fair legal environment, and an innovative education system, which we will be working toward in 2019 and 2020.”
It’s worth pointing out that Louisiana has lost a net of 66,000 people – that’s the net figure of outmigration – over the same three years since those taxes were passed. And on top of the 66,000 more folks who have left the state than have moved in, there is this depressing news from the U.S. Bureau of Labor Statistics…
While the unemployment rate in Louisiana went down from 2013 to 2018, it’s still well above the national average by two alternative measures, according to a recent report from the U.S. Bureau of Labor Statistics.
In 2018, Louisiana’s official unemployment rate—which includes all jobless people who are available to take a job and have actively sought work in the past four weeks—came out at 4.9%, or 103,900 people, higher than the national rate of 3.9%.
The report also tallied the state’s unemployment rate using the broadest measure of unemployment, which includes the officially unemployed as well as workers employed part-time for economic reasons and those marginally attached to the labor force. By that metric, Louisiana’s unemployment rate spikes to 9.4%, significantly above the U.S. rate of 7.7%.
Included in that measure are involuntary part-time workers, who make up the largest share of underutilized workers in the state. Some 66,300 Louisiana residents are employed part-time because of slack work, business conditions or an inability to find a full-time job.
Also included in that measure—and comprising the smallest group of underutilized workers—are “discouraged workers,” or people who aren’t looking for work because they believe no jobs are available for them. In 2018, there were 11,200 discouraged workers in Louisiana.
That U-6 number, the one which counts the underemployed, looks a whole lot worse when you consider the net outmigration over those three years.
But none of this ought to be a surprise. The business community has been begging, pleading and screaming for three years that Edwards’ tax-happy policies were going to poison the state’s economy and drive away its jobs and capital, and it’s getting a lot harder for Edwards and his people to deny there’s a problem. His fraudulent “business summit,” which is going to consist of a bunch of his campaign contributors and people with government contracts who function essentially as hostages to his public-relations effort, can’t hide the fact.
And the worst is yet to come. The buzz continues to build about the future of the state’s largest domestically-headquartered company CenturyLink, which has been rumored for some time to be picking up stakes and leaving Monroe; the latest we’ve heard is that company’s executives have been notified the move out of Louisiana is now inevitable, though it might not be publicly announced until 2020 because of an economic development contract CenturyLink has with the state. When CenturyLink goes, it will leave Louisiana with only one Fortune 500 company headquarters – that being Entergy, which is under siege by the leftists on the New Orleans city council over having hired paid demonstrators to counter paid demonstrators protesting the construction of a power plant in New Orleans East.