SLU Pundit

The weblog of Kevin Boyd, a student at Southeastern Louisiana University

Wednesday, July 14, 2004

Governor Blanco vetoes tax incentive

Governor Kathleen Blanco (D-Louisiana)vetoed a tax incentive plan yesterday.

Supporters of the bill included Republican pro-business lawmakers, members of the Black Caucus, the AFL-CIO, the Louisiana Association of Business and Industry, and the Louisiana Chemical Association. The bill gathered 128 co-sponsors out of the Legislature's 144 members.

"It's very seldom you can put together a coalition like that," said [Mack]White (R-Denham Springs), who had amended the bill repeatedly in an attempt to address Blanco's concerns. "There was a lot of time and effort put into this bill. I'm very disappointed."

White's bill would have expanded the state's Quality Jobs Program to include the hiring of new contract workers at manufacturing plants. Now, the program offers the incentive to a variety of companies if they hire new workers at certain salary levels and offer to pay at least 85 percent of each employee's health insurance. In return, the companies get a tax rebate from the state worth 5 percent or 6 percent of payroll for the new workers.

White's proposal would have given 80 percent of that rebate to manufacturers that provide jobs to new contract workers on a plant site, as long as they meet the program's pay and benefits standards. It would not include construction workers, and the bill contains safeguards to prevent companies from dismissing employees and then bringing them back on contract.

While this bill by Rep. White was well intentioned, it is a symptom of the underlying problem with Louisiana's tax code, it's too damn complicated. What the Legislature needs to do is focus on reducing the overall burden on business and everyday Louisianians at large and reducing the size of the Louisiana government. After all, business would have no need for these incentives if Louisiana had a tax structure that was competitve with the rest of the country.

Blanco Chief of Staff Andy Kopplin said the Quality Jobs Program is already an effective incentive for encouraging business expansion by new or existing companies in Louisiana. The administration was not convinced that the additional incentive under White's bill was needed to persuade manufacturers to expand.

"It's a very expensive program. We're very successful with it, but we don't need to spend more money to get the same outcome," Kopplin said.

In other words, this bill would put in danger Blanco's plans to continue expanding the size of the Louisiana state government. Besides, Louisiana governors since Huey Long have proven that the Louisiana state government know how to spend money better than all of us mullets. (sarcasm to the unwashed)

Greg Bowser, director of governmental affairs for the chemical association, said the bill creates an incentive, not a subsidy. Simply because a company's human resource policy calls for using contractors at the plant site instead of hiring them directly is no reason to deny the tax rebate.

"A job's a job. We either want to create jobs or we don't," Bowser said. "I don't think we've gotten to the point in Louisiana where we want to say we want to create this kind of job but not that kind of job."

Um Greg....this incentive does nothing but say we want to create this kind of job but not that kind of job.

Again, the Louisiana state government and "business lobbyists" miss the overall point which is there would be no need for these special incentives if Louisiana had a fair and competitive tax code. Governor Blanco ran on a platform on reform, unfortunately, she refuses to lead Louisiana in that direction.


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