The state's Mega-Project Development Fund started with $300 million and is down to $56 million
Louisiana Economic Development Secretary Stephen Moret faces a dilemma: As business investment picks up and the national economy begins to recover from the worst recession in decades, the state's financial incentive programs for attracting industry are growing thin.
View full sizeMost of the money in the state's financial incentive programs has been spent on various projects, including the Federal City project in Algiers, photographed in October. Moret told legislators last week that he expects the $56 million that remains in the state's Mega-Project Development Fund to be depleted by the end of the year, while the state's Rapid Response Fund continues to shrink.
The mega fund, which is designed for large-scale development projects, started with $300 million in 2008-09, Gov. Bobby Jindal's first budget cycle, while the Rapid Response Fund contained $40.9 million. But most of that money has been spent on various projects, including a north Louisiana poultry plant and the Federal City project in Algiers, while the rest of the money is tied up in offers the state has made to targeted companies.
The only plans for replacing the cash is $10 million in Jindal's budget targeted for the rapid response fund. The loss of the incentive funds "will have a very significant impact on us" in the 2011-12 fiscal year, Moret said. But he noted that other states are having similar problems as they struggle to balance their budgets in tight economic times. And in the short term, the state has multiple offers on the table for companies it hopes to bring to Louisiana. "I think we'll probably finish this calendar year in pretty good shape," Moret said.