All of the above are being played out now in the Louisiana legislature and when all is said and done the average tax payer and middle class will be the ones who get screwed by our elected officials. Businesses will once again come out a winner and why not, that is where political campaign contributions come from.
Jefferson Parish Assessor Lawrence Chehardy noted the homestead exemption of $75,000 has not been changed since 1982 and that 20 years ago 81% of homeowners was covered by the exemption. Today that amount is 46%. That is a great revelation but you do not hear the voices of LABI acknowledging that more home owners have been paying more taxes on their property.
LABI and the business community they represent are opposed to raising the exemption on the grounds that business would have to be taxed to make up for the short fall. Of course to start with, most businesses do not pay their fair share in taxes, state or federal because of the tax loopholes that are created for them and the corporate welfare and other incentives they receive from the state or federal government.
Lets take the Shaw Group who's headquarters are in Baton Rouge, La. They announced May 6, the company will decline $172.5 million in incentive payments from the state for a major manufacturing project or for the company's commitment to keep its headquarters in Baton Rouge as reported in the Times Picayune. Shaw's chairman was quoted in the article as saying the Shaw Group will continue with its plans but would rather see the government incentive money spent on higher education or other state needs. That was a noble decision by the Shaw Group. Evidently the project was needed since Shaw will continue with its plans. The article also pointed out Shaw was a global provider with $7 billion in revenue last year. Does a $7 billion company need incentives to stay in Louisiana and expand their business?
Now for Tom Benson and the New Orleans Saints. The state has paid Mr. Benson more than $300 million in cash and improvements since 1985. Governor Jindal has recently agreed to commit $85 million of state money to upgrade the Superdome for the saints and would also require up to $6 million in payments a year to the saints if stated targets are not met. This new proposed contract which has to be approved by the legislature would replace the present on which expires in 2010. According to reports Mr. Benson paid approximately $75 million for the franchise and the NFL said the franchise is now worth approximately $800 million. That is a pretty good return on equity for Mr. Benson at the expense of the people of Louisiana.
Under the new contract Mr. Benson's company would buy Dominion Tower and lease space back to the state of Louisiana. The New Orleans Center and parking garage is included. In the Times Picayune of May 10 this is what one local real estate expert said. "Benson and his various companies can apply for new market tax credits and that they might make enough money that they can take the credits themselves to offset their federal tax burden." That is a real sweet deal for a multimillionaire and his companies in any ones book. Where are the loopholes in the tax code for the average payer?
Those who oppose the increase in the homestead exemption should tell the average citizen just how much money the state gives out yearly in corporate welfare and so called incentives to Louisiana businesses. The number would be staggering. Yet the budget before the legislature contains reductions in the millions of dollars for higher education, health care and other projects. As a result, the legislature has approved a proposal for public colleges and universities to raise tuition 5% for the 2009/2010 school year. The people get screwed again while the millionaires and their companies continue to make out like bandits. I have written many times how politicians try to gain favor with the voters by promising no new taxes or increase in taxes and then get into the pockets of ordinary citizens 100 different ways.
State and federal taxes are written to help those that have the most and those that can afford to pay. It is special interest politics at its worse. There was a time when a company would locate to a certain state because of the normal advantages that state had to offer such as, transportation, (La. has water transportation, the cheapest way to move goods.), rail, truck, natural resources, location and a reasonable labor force. But then greed got in the way and companies started to use blackmail on the states for monetary concessions to locate their facilities. And Politicians jumped at the chance using taxpayer money to subsidize company operation when there was no need.
The present economic conditions in the U.S. is a reminder just how greedy corporations have been and how eager politicians are willing to go along. By the way, unemployment in Louisiana in March of 2008 was 3.4%. In March of 2009 it was 5.3%. Where are all the new jobs that are supposed to be created by La. businesses that receive millions of dollars in incentives from the state to do so. Tax fairness, you will not find it in Louisiana.
