Inside Report: Compare proposed La. cuts to real cuts of recent years

By Koran Addo

Capitol news bureau

Gov. Bobby Jindal didn’t hold back on Tuesday as he surrounded himself with a who’s who of industry leaders and lobbyists to call attention to how terrible a budget proposal taking shape in the state House would be for Louisiana.

The alternative budget plan, at the time, included a 15 percent reduction in the tax breaks from which Louisiana’s film industry, dairy farmers and manufacturers currently benefit.

In all, state Democrats and a faction of House Republicans calling themselves “fiscal hawks” planned to take back about $91 million of the $609 million in tax breaks enjoyed by select Louisiana companies.

To be clear, the proposal wasn’t a new 15 percent tax.

State Rep. Cameron Henry, a New Orleans Republican, explained that the proposal was asking large industries over the next four years to “take 15 percent less” in gifts than they’re getting right now.

But, according to Jindal, asking companies to collect only 85 percent of their current tax breaks would be a “giant step backward,” “a job killer” and a signal to the rest of the country that Louisiana is returning “back to the way we used to do business in the 1980s.”

Rolling back any part of the tax breaks, Jindal said, was akin to reneging on promises made to industry and would hurt the states’s reputation.

Of the 20 or so people flanking the governor during Tuesday’s press conference, 15 of them stepped forward to talk about how the alternative budget plan would impact their industry.

Will French, co-founder and president of Film Production Capital, argued that taking back some of the tax breaks the film industry enjoys would lead to catastrophe.

“To blindly and uniformly cut 15 percent from every major tax credit program is to kill the film industry in one fatal death blow,” French said.

The motion picture investor tax break available to Louisiana’s film industry costs the state about $230 million per year, according to the plan circulating around the State Capitol. The proposal in the House would reduce that number by $34.5 million, so the tax break would cost the state $195.5 million per year.

But compare that proposed 15 percent tax break some industries are wringing their hands over with the state entities that have actually lived through a fiscal shock to the system.

State general fund support for Louisiana’s public colleges and universities has been cut more than 80 percent since the 2007-2008 fiscal year. Louisiana’s youth services have been cut 40 percent, Veteran’s Affairs has been cut 69 percent and the Department of Environmental Quality has had a 96 percent cut.

A number of legislators polled at the State Capitol this week couldn’t recall any of those state agencies getting the attention from the governor the industry leaders got on Tuesday.

State Rep. John Bel Edwards, D-Amite and chairman of the House Democratic Caucus, summed it up this way: “The budgets the governor has proposed have asked us to cut 80 percent from higher education over five years. He’s busy killing higher ed, but he gets people behind him to protest 15 percent.”

It’s important to note that while the governor gets a bad rap for how state budget cuts have negatively impacted colleges and universities, his administration has supported more than $700 million in higher education infrastructure investments since he’s been in office. He’s also presided over a time when graduation rates and other measures have been on the rise.

But the governor’s posture on some issues and his treatment of some entities call into question his priorities for the state.

State Rep. Chris Broadwater, R-Hammond, put the issue like this: “We have to think about what is fair to the whole. It’s easier to do the right thing if all of us hurt a little bit, rather than exerting incredible pain on a select group.”

Koran Addo covers higher education for The Advocate’s Capitol News Bureau. You can reach him at kaddo@theadvocate.com.