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In 2014, Louisiana Gave Away $1.7 Billion in Corporate Tax Exemptions

February 22, 2016

Louisiana is facing a budget crisis. The state needs $940 million to fix the budget deficit by June 30, 2016, and another $2 billion next year.

The Louisiana legislature is in special session this month to confront the issue.

Meanwhile, on February 19, 2016, Louisiana Legislative Auditor Darryl Purpera released this 25-page audit of tax revenues and exemptions for fiscal years 2010 to 2015 (projected). (For a one-page summary of the report, click here.)

Based on FY 2015 projections, Louisiana tax exemptions are expected to finally overtake Louisiana tax revenues (click to enlarge):

Tax Revenues 1

And guess which type of tax is grossly outdone by its exemptions?

Corporate Income and Franchise:

Tax Revenues 2

Purpera adds:

Together, the corporate income and franchise tax exemptions were almost $1.7 billion in fiscal 2014 compared to $624 million in revenue.

$1.7 billion in excusing corporations from paying taxes to a state that is facing belly-up status in its budget.

In other words, for every dollar corporations paid in taxes in FY 2014, they were excused from paying an additional two.

Corporation owes three dollars; broke Louisiana says, “We’ll take one.”

These things ought not to be.

Purpera notes and suggests the following:

…Louisiana has a large number of tax exemptions — 464 — and just 52 have sunset provisions that set a specific time for the legislation to expire unless lawmakers take action beforehand. That means the vast majority of Louisiana’s tax exemptions are essentially continuing without evaluating their value or benefit. As the Legislature continues to look for money to make up the state’s budget shortfalls, it is important for lawmakers to have a systematic and robust review process for reviewing tax exemptions.

  • Matter for Legislative Consideration 1: The Legislature may wish to consider requiring that all new or modified tax exemptions contain clear performance statements that include their public purposes and expected outcomes.
  • Matter for Legislative Consideration 2: The Legislature may wish to consider developing a schedule for how often reviews should be conducted or include sunset dates on all exemptions that dictate when they should be reviewed.
  • Matter for Legislative Consideration 3: The Legislature may wish to consider designating who specifically will conduct reviews of tax exemptions and what criteria will be used for the reviews.

There is no reason for Louisiana to be broke. We must stop picking our own pockets to fatten corporations.

broken piggy bank

_____________________________________________________________

Schneider is a southern Louisiana native, career teacher, trained researcher, and author of the ed reform whistle blower, A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education.

She also has a second book, Common Core Dilemma: Who Owns Our Schools?.

both books

Don’t care to buy from Amazon? Purchase my books from Powell’s City of Books instead.

From → legislation

4 Comments
  1. The vortex of cash-flow between corporations and politicians is sucking the country down into a grabitational singularity.

  2. Christine Langhoff permalink

    Massachusetts ain’t broke and neither is its capital city, Boston. But the Boston schools are facing a shortfall of $50 million dollars for next year, while the mayor and governor have been out successfully courting General Electric to move its corporate HQ to the newly developed Seaport District. GE has been looking for a new home since the state of Connecticut decided to put a temporary surcharge on corporate taxes.

    GE is among the notorious group of multi-national companies which not only do not pay taxes, but actually get tax credits. Boston is currently deciding where to put the helipad company executives require, enhance access roads and re-open to traffic a hundred year old bridge now used only by pedestrians, to the tune of $270 million. Oh, and GE continues to refuse to clean up the PCB’s with which it contaminated a major waterway in western Massachusetts in the 1970’s, despite its designation as a Superfund site.

    Meanwhile, high schools will be left without librarians, endangering their accreditation. Coincidentally, (D) Mayor Marty Walsh is in favor of charter expansion, as is the governor, (R)Charlie Baker.

    See more:https://digboston.com/ge-boston-deal-the-missing-manual-part-2/

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