[StBernard] Louisiana's economic success not seen in state revenue collections, lawmakers say

[Westley Annis]

Lawmakers are familiar with Economic Development Secretary Stephen Moret's
talking points about Louisiana's fantastic job growth and Gov. Bobby Jindal
<http://topics.nola.com/tag/bobby-jindal/index.html> 's success in
attracting new business to the state. They just want to know when the
state's economic victories are going to start generating some extra revenue
for Louisiana's cash-strapped budget. 

In a presentation to the House Appropriations Committee Tuesday, Moret
touted a recent piece of good news as an example of the strides Louisiana
has made in economic development. Louisiana unemployment in January was down
to 4.9 percent, the lowest rate found in any Southern state, he noted.

"Our economic outlook is excellent," said Moret. 

Still, this growth in the economy and Louisiana job market isn't reflected
in the state's revenue. This year, Louisiana is only expected to see income
tax collection growth around two percent. Corporate tax collection is
supposed to decline by nearly 17 percent, according to the Legislative
Fiscal Office.

"The job that I have in balancing the budget has yet to reflect all those
jobs [coming to the state]," Rep. Jim Fannin, R-Jonesboro, told Moret. "Can
you tell me when you expect that to change?" 

Fannin suggested that Louisiana's revenue collections may be lagging because
the state government has given out a lot of tax breaks to businesses, which
cut into tax collections. "Revenue is not keeping up with growth. We have to
figure out a piece that we don't have figured out yet," he said. 

Moret blamed Louisiana's stagnant state revenue on a few factors. Though
Louisiana's economy is growing, the United States economy is still sluggish,
which affects the state's economic health. The state revenue also took a hit
as a the large influx of funding to help cope with Hurricane Katrina started
to diminish, he said.   

Still, Moret also acknowledges that tax breaks and credits are being used
more often than in previous years. "When you look at the utilization of tax
exemptions, it has been on an unprecedented growth curve," he said. 

Louisiana Economic Development administers and advocates for some of state's
most high-profile tax breaks for businesses, but Moret said the agency is
responsible for a relatively small amount of the state's total tax
incentives. 

He did acknowledge that Louisiana's film tax credit program costs state
government money. "From a fiscal perspective, it is by far the most
expensive program that we have," said Moret of the state's financial
incentive for the film industry, which has brought several movie productions
to Louisiana. 

But Fannin implied that he wanted to take another look at tax breaks more
broadly, not just those for the film industry. Louisiana's state government
hasn't been able to dig itself out of the financial hole it sank into a few
years ago, in spite of a growing economy, he said. 

"I would like to have some more private discussions," the Appropriations
chair pointedly told Moret at the committee meeting.