Economic plan proposed
Jindal’s target is good jobs
Gov. Bobby Jindal unveiled a package of proposed economic development incentives Thursday that he said will make Louisiana more competitive.
The proposals include a more business-friendly approach to calculating taxes and a moving cost rebate for companies that relocate their headquarters to a Louisiana ZIP code.
One of the incentives is a property tax exemption that parishes would be asked to embrace at a potential loss of $25 million in annual revenue for them.
The Jindal administration is projecting that the incentives will create 10,000 new jobs in the next five to 10 years.
The proposals will be debated in the legislative session that starts March 12.
The package is carefully crafted to circumvent restrictions on the Legislature creating tax breaks in an even-numbered year such as 2012.
The constitutional prohibitions put new taxes off the table as well as tax exemptions, exclusions, deductions and credits.
Rebates are allowed, House Clerk Alfred “Butch” Speer said.
The governor’s proposals include two rebates. He wants to:
- Create a payroll rebate of up to 15 percent for next-generation automotive companies and other “highly competitive” projects. The proposal could reduce state revenue by $6 million in fiscal year 2016-2017. It would be an enhancement of a smaller payroll rebate already in place.
- Create a 25 percent rebate over five years on relocation costs for companies that move their corporate headquarters to Louisiana. Companies would have to pay salaries of at least $60,000 a year. The proposal could reduce state revenue by $5 million in fiscal year 2016-2017.
- Allow some companies to lower their corporate income and franchise taxes by basing them on the amount of sales they generate in Louisiana instead of on their sales, property and payroll. The proposal could reduce state revenue by $5 million in fiscal year 2016-2017.
- Offer a 10-year property tax exemption to targeted sectors such as corporate headquarters, data centers and digital media and software developers. The proposal has the most varied revenue loss projections, ranging from $2.5 million to $25 million for parishes in 2016-2017.
“These reforms are going to make Louisiana even more competitive,” Jindal said during a news conference at the Louisiana Technology Park off Florida Boulevard.
The property tax exemption would entail several hurdles.
The proposal would require the support of two-thirds of the Louisiana Legislature and the approval of voters in an election. Parishes would have to decide in an additional vote by their governing authorities to accept the exemption and forego the property tax revenue.
“I don’t think every single parish will participate, and that’s OK,” Jindal said.
The governor said parishes that decide against adopting the exemption would have the option of embracing it at a later date.
A property tax exemption already exists for manufacturers expanding or building new facilities.
Jindal selected state Sens. Mike Walsworth and Neil Riser and state Rep. Joel Robideaux to shepherd his economic development package through the legislative process.
Riser, R-Columbia, and Robideaux, R-Lafayette, chair the tax writing committees in the state Senate and House.
“I look forward to getting the bills through the House and putting the burden on the Senate,” Robideaux joked.
Walsworth said as many tools need to be created as possible to bring in quality jobs.
He said he wants Louisiana to be above average when compared with other states.
“Economic development is not easy, and there’s a lot of things that go unnoticed,” Walsworth said.