Some question their impact on state revenue
Baton Rouge -- Three bills expanding economic development incentives that administration officials say will help bring businesses to the state passed nearly unanimously in the Louisiana House Tuesday, despite questions about their impact on state revenue and whether the measures skirt the prohibition on tax legislation in the session. Sought by the Department of Economic Development, the bills would grant rebates to companies that move their headquarters to Louisiana, give selected firms rebates of a portion of their payroll cost and allow certain businesses to use a favorable method of calculating their in-state income for tax purposes.
Rep. Joel Robideaux, R-LafayetteAll three bills were sponsored by Rep. Joel Robideaux, R-Lafayette.
House Bill 937 would give companies a rebate of up to 25 percent of their relocation costs for moving their headquarters to Louisiana or expanding a headquarters already in the state if the move creates at least 25 new jobs that pay either $60,000 or 200 percent of the average wage in the parish where the office is located. That bill passed 82-12.
House Bill 958 would create a Competitive Projects Payroll Incentive Program, giving rebates equal to up to 15 percent of payroll costs to businesses selected by the state economic development secretary. Secretary Stephen Moret has said the proposal would help the state negotiate with two automotive firms that are considering sites in north and central Louisiana.
Robideaux said Tuesday that the credit would "allow us to land one of those megaprojects we haven't been able to thus far."
That bill passed 86-9.
Opponents to both bills noted that they diverged from the state's typical policy of issuing credits, which offset tax liability, instead of rebates, which are given directly to the company.
Legislators are constitutionally prohibited from bringing up most tax bills, including credits, during even-numbered years, though tax rebates are allowed. While many of the state's incentives are in the form of credits that offset a company's tax liability, Robideaux said he is proposing rebates to move the process along this year.
"There are some projects out there they wanted to get ahead of the curve on," he said.
Louisiana State CapitolRep. Roy Burrell, D-Shreveport, said he worried additional tax breaks could worsen the state's budget problems.
"It appears to me, now that I'm on appropriations, that we're getting into a big problem with revenue," Burrell said. He also added that he worried "we're not realizing the kind of return that we're supposed to be getting on these credits."
A third bill, which passed the House unanimously, would allow companies to use a more favorable method when calculating revenues that would be taxed in the state.
The Senate Revenue and Fiscal Affairs committee approved versions of all three bills last week and the bills are headed to the full Senate.
Jeff Adelson can be reached at jadelson@timespicayune.com or 225.342.5207.