Business Report
While it has been two weeks since state lawmakers declared sine die and went home for the summer, business leaders are still trying to get a handle on just how bad the bills passed during the session will be for the business community.
Though it will be several weeks before they unravel all the intricacies of the revenue-raising measures that stick it to big business, they know this much: The 2015 session will go down as one of the worst in decades for business interests.
“It was a completely nonsensical, anticompetitive revenue strategy,” says Baton Rouge Area Chamber President and CEO Adam Knapp.
That revenue strategy involved plugging a $1.6 billion shortfall, in large part, by reducing key business tax credits, exemptions, exclusions, deductions and rebates. The 11 bill packages advanced by the Legislature cut the digital interactive media and software tax credit, as well as the Angel Investor Tax Credit Program and the inventory tax credit. They also cap the Motion Picture Tax Credit at $180 million a year for the next three years, gut the solar tax credit program, reduce the Corporate Headquarter Relocation Program rebate and limit which businesses are eligible for participation in the Enterprise Zone Program.
“More concerning than the fact they raised businesses’s taxes is the tone that came out of the Capitol,” Knapp says. “For a decade or more you’ve had a reform-minded, business-savvy tone. Now we’re hearing old Louisiana-sounding populist rhetoric.”
Several other issues that had been high on the business community’s wish list didn’t fare well either. Judicial transparency, which would have subjected the state’s judges to the same financial disclosure rules required of the Legislature, was defeated after the judges opposed it.
Paycheck protection, an automatic funding mechanism used by teachers’ unions to collect union dues, was also defeated—a big blow to the Louisiana Association of Business and Industry.
“Legislators showed at every turn they did not want to oppose populist polices of the past,” LABI President Stephen Waguespack says.
How this will all play out in the national rankings that measure Louisiana’s business climate relative to other states remains to be seen. Until then, the business community is trying to take solace in the two key victories that came out of the session.
For one, higher education funding cuts were far less drastic than originally proposed by Gov. Bobby Jindal’s administration. In addition, lawmakers reached a compromise over the controversial Common Core educational standards.
A handful of minor victories emerged as well, but for now business groups are arming their members with information they will need in order to challenge some of the tax code changes in court, which is expected. They’re also looking ahead to next year’s special session.
“We’re turning our attention to the spring 2016 special session, which will be needed to fix some of this mess,” Knapp says. “We’re also focusing on the fall elections. The outcome now is more important than ever.”