As Louisiana reels from some of the highest rates of COVID infection in the nation, state Republicans appear to have a different agenda – giving millions of dollars in tax breaks to large corporations.
This comes at a time when federal stimulus funds for unemployed workers are set to dry up in less than a month, and experts are predicting a “tsunami of evictions,” both statewide and across the country.
Just four years after Governor John Bel Edwards stabilized the state’s budget, after nearly a decade of shady budgeting by former Governor Bobby Jindal, some officials are worried that the state is again headed in the wrong direction.
By the end of the legislative session on Tuesday, July 2, the Louisiana State Legislature had approved a corporate tax giveaway to the amount of $25 million in one year. The cost is expected to rise each year, with an expected loss of $230 million in revenue by the year 2025.
According to the Associated Press, the Legislature agreed to a $11 million tax credit to help the state gambling industry. They also passed a bill to suspend the corporate franchise tax for one year, to renew the state’s historic tax credit program for another four years, and to allow businesses to keep a larger portion of sales taxes for themselves.
Republicans in Baton Rouge noted that some businesses were losing profitability in the coronavirus pandemic.
Senator Sharon Hewitt (R-Slidell) said that “without a little bit of help, these businesses are going to shut down.” Senator Hewitt is a noted opponent of social spending measures for working class Louisianians.
However, still weary of the memory of four years ago, not all legislators were on board with this corporate welfare. Senator Karen Carter Peterson (D-New Orleans) called it “deja vu.”
Senator Brett Allain (R-Franklin) cautioned that every tax credit now means “something that doesn’t get funded in the budget.”
“These things aren’t free, and they can come back to haunt you,” said Senator Jay Morris (R-Monroe).
“And if they do come back to haunt us, I for one am not going to put this on the backs of individual average citizens when people start wanting to raise taxes,” Sen. Morris added.
It is unclear which tax breaks Governor Edwards will sign into law.
Given the massive economic downturn, the state’s ability to afford such incentives is more in question now than ever. And some legislators are not even sure if this corporate windfall even translates into better outcomes for Louisianians.
“Something that concerned me this year in general, but particularly with tax-related legislation, was the lack of evidence or data that these tax breaks would ever benefit individuals,” Representative Mandie Landry (D-New Orleans) told Big Easy Magazine.
“‘Trickle down’ guesstimates never seem to go anywhere.”
