Gov. Bobby Jindal spent the first seven years of his terms in office giving millions of dollars in tax breaks and subsidies to attract businesses to Louisiana, touting those efforts around the country as fueling job creation and an economic development boom.
Now in his final months as governor, Jindal seems to have turned on those longtime business allies. He’s pushing proposals to strip tax credits for companies, criticizing “corporate welfare” and slamming corporations that raise concerns about religious objections laws.
Jindal’s former chief of staff Stephen Waguespack, now head of the powerful Louisiana Association of Business and Industry, is battling one of the governor’s main tax proposals of the ongoing legislative session.
It’s an odd turn of events for a Republican governor who spent nearly all of his tenure in office heavily wooing corporate investment in Louisiana, pouring millions into the efforts.
Jindal’s economic development wins have been a hallmark of his two terms.
He’s heavily publicized billions of dollars in projects that have come to Louisiana since he entered office and rankings in economic development publications that count Louisiana as among the top states to do business.
But Jindal’s national political ambitions and his need to balance the budget appear to have shaken the alliance.
Louisiana’s business lobbying groups are working to defeat the centerpiece of the governor’s budget recommendations, calling it a multimillion-dollar tax hike on business.
Jindal proposed to lessen spending on refundable tax credits, in which the state pays out more than the taxes a person or business owes. He wants to use the savings to pay for colleges and health care in the fiscal year that begins July 1, to help close a $1.6 billion budget gap.
Business organizations object to the most expensive tax break targeted: the inventory tax credit, which refunds businesses for paying local property taxes on their inventory. Jindal wants to limit the credit to only cover a business’ state tax liability, which the administration estimates would save the state as much as $377 million annually.
One of the most outspoken critics of the proposal is Waguespack and the Louisiana Association of Business and Industry. He’s said scaling back the credit would harm the state’s business rankings, damage the economy and cause job losses.
While Jindal steadfastly refuses to support anything he considers a tax increase, he calls caps on refundable tax credits a reduction in state spending.
“We’ve worked very hard to make Louisiana a business-friendly state. I’m proud of the progress we’ve made,” the governor said when asked about the distinction. Then he added: “At the same time, I think it would be unfair to leave corporate welfare untouched while we’re looking at a challenging budget situation.”
Business groups say thousands of companies will pay inventory taxes to local government for which they will no longer receive reimbursement, thereby increasing their tax bills.
Jindal said he’d support an outright elimination of the inventory tax as a counter-offer. But local government agencies are battling that idea because it would leave them with a hefty hole in their tax collections.
Beyond finances, Jindal’s lashed out at corporate leaders who oppose religious objections laws.
The governor is pushing such a bill, to ban Louisiana from denying licenses, certifications, contracts or tax deductions for actions a person takes because of “a religious belief or moral conviction” about marriage.
Critics of such laws say they allow discrimination of same-sex couples. Jindal says they protect Christians who are morally opposed to same-sex marriage.
Computer giant IBM, which is building a Baton Rouge facility that will employ 800 people and is receiving millions in state subsidies from the Jindal administration, sent the Governor’s Office a letter opposing the Louisiana bill as discriminatory.
Jindal, who is courting evangelical Christians and social conservatives for his likely presidential campaign, wrote an opinion piece for The New York Times slamming business leaders who have raised objections to such laws. He’s repeated the comments locally as well.
The warm relationship between Jindal and the business community seems to have chilled.
Melinda Deslatte covers the Louisiana Capitol for The Associated Press.