We know for a number of years that the state legislature has given to the business community tax breaks that total approximately $7 billion a year that robs the state of much needed revenue. We know that number is accurate because it was confirmed by the legislature and by an excellent article in the Times Picayune several years ago by Edward Ashworth, Director of the Louisiana Budget Project who articulated the problem.
Now we read in the news two articles published in the New Orleans Advocate dated 5/27/21 how the Hollywood movie industry's tax breaks are up for renewal by the state legislature and just how much those tax breaks has cost the state in lost revenue. One article by capitol bureau editor Mark Ballard, reports for every tax payers dollar the state gives away in tax credits, state and local governments received 35 cents in 2020. But chief economist for the state legislature, Greg Albrecht points out, because only the states tax revenues are in play, the state return is only 22 cents on the dollar. And that in 2020 the state gave away $132.8 million in tax revenue and received only $29.4 million in taxes.
In an editorial view commentary in the same May 27 edition it was reported that the program of tax credits for the film industry has cost the state and tax payers over $2 billion since its beginning. It is obvious there is no respectable oversight of the program that would allow such a paltry return to the state and the tax payers for such a huge investment and receive less than a 25% return. Does anyone think a business would give away that amount of money?
The same state legislature that approved Louisiana's tax give away also told us that Louisiana needs $14 billion for infrastructure and repairs. The state is almost last in every category that deals with the quality of life and many other issues concerning state spending but the state legislature has a culture of dealing with only special interest groups such as the business community at the expense of the public good.
The $7 billion doled out in tax breaks every year by the state to business are used by business to reward their CEO's, executives and their shareholders. That is how corporate America works and why over the last 40 years their incomes grew by over 900% while their average workers wages grew just 12% per a previous report. The answer is simple, everyone should pay their fair share of taxes to support the governments ability to serve the people. We just don't have the elected officials who have the character or courage to implement such a common sense answer.
All governments should operate on the principle that if a business can not make it on its own its not a viable business and should change its business attitude and stand on its own. Its easy to understand. The $7 billion given annually by the state to business represents about 25% of the states past yearly budgets. Does any one think any business would give up 25% of its revenue and say we can do well financially and get along without it? And does any one really believe the state can give up that much revenue and still take care of the needs of the state and the needs of its people?
This commentary written by Joe Lorio
Note: The very first civilization on earth, that of the Sumerians, which began almost 6000 years ago left written records that have been found. They stated that they were taught that understanding the mistakes of the past was the key to a better future. And that a failure to do so would result in a future that looked like the failed past. Six thousand years later, the state legislature has learned nothing.
