'We do not have a spending problem in this state. We have a revenue problem'
Saying the state's financial problems are too severe to be solved by budget cutting alone, a newly minted coalition of labor unions and left-leaning advocacy groups said Thursday that the state Legislature should review -- and possibly eliminate -- some of the tax breaks that are costing the state more than $7 billion a year in potential revenue.
View full sizeEdward Ashworth, director of the Louisiana Budget Project, calls for review of Louisiana motion picture credits worth $119 million a year. This scene from 'The Curious Case of Benjamin Button' was filmed at the Newman Bandstand in Audubon Park. "We do not have a spending problem in this state. We have a revenue problem," said Edward Ashworth, director of the Louisiana Budget Project and a driving force behind the new Better Choices for a Better Louisiana coalition. "These tax cuts have blown a hole on the revenue side of the budget."
But the group faces long odds in convincing political leaders to go along with their suggestions, as Gov. Bobby Jindal has ruled out tax increases as his administration looks for ways to patch a $1.5 billion budget hole anticipated for the 2011-12 budget year. Any attempts to eliminate or suspend tax breaks that are currently on the books would be considered a tax increase, Jindal spokesman Kyle Plotkin said.
"We will fight against attempts at tax increases and will force government to live within its means, just like Louisiana families and businesses have to do," Plotkin said via e-mail.
At issue is more than 300 exemptions to Louisiana's sales and income-tax laws that have been granted by the Legislature over the years. Members of the coalition says the tax breaks are rarely, if ever, reviewed by lawmakers.
Ashworth, whose May 2010 report, "Louisiana's Hidden State Budget," forms the basis of the group's recommendations, cited several tax exemptions that he would like to see reviewed, including motion picture credits worth $119 million a year and $15 million a year in severance tax exemptions for companies that drill horizontally for natural gas.
He said the drilling exemption made sense several years ago, when the industry was struggling, but is hard to justify at a time when a land rush is under way in northwest Louisiana by companies eager to exploit the Haynesville Shale gas deposits. "You couldn't keep those ... companies out of Louisiana right now with the National Guard," Ashworth said.
In addition to the Louisiana Budget Project, the new coalition includes the Louisiana Federation of Teachers, the Louisiana Association of Non-Profit Organizations, the Louisiana NAACP, Agenda for Children and the Louisiana Primary Care Association.
Any attempts to raise revenue by changing the tax code would almost certainly need a two-thirds vote in the House of Representatives -- a tall order, if not impossible, in an election year.
Jan Moller can be reached at jmoller@timespicayune.com or 225.342.5207.