The legendary Louisiana politician John Breaux once quipped that his vote could not be bought “but it can be rented.”
Decades ago, that was delightfully humorous but the remark also pulled aside the veil of rhetoric about the public interest to show the political realities in the Congress.
What are the ugly realities hidden behind today’s rhetoric of “economic development”? One of them is that Louisiana’s current positive ratings in business climate surveys are based on renting loyalty.
One Acadiana, the regional business group based in Lafayette, is only the first of the major organizations out of the gate with an agenda of keeping state tax dollars flowing to the rented corporate citizens of the state. It will not be the last, because business giveaways have become standard in the past few years; austerity threatens the moola. We shall doubtless see organizations from GNO Inc. to the Baton Rouge Area Chamber and others in between arguing that the first priority, ahead of all others, is to restore cuts in “incentives” for “economic development.”
When the Legislature faced this spring a catastrophic budget shortfall, lawmakers had a choice. They could agree to further cuts to higher education and health care urged by Gov. Bobby Jindal, or they could raise revenue. The latter was easier politically through modest taking back of tax breaks lavished on business during Jindal’s two terms. Jindal did not invent the practice but he certainly made it worse.
Even the governor advocated some reductions of what he called “corporate welfare.” But given how difficult it was for lawmakers to cobble together coalitions to avoid the Jindal cuts, the best they could do was what most people recognized as poor policy: across-the-board reductions in many tax breaks, old or new.
That the budget crisis was resolved, albeit imperfectly, is now a cause of complaint in One Acadiana’s agenda for the next governor and Legislature.
“Economic development incentive programs represent less than 5 percent of the state’s total tax exemption budget, yet they shouldered a disproportionate share of the blame in the debate over how to balance the budget,” One Acadiana’s new policy paper says. “Programs were slashed across the board with little consideration for impact on job creation and investment.”
But what was the alternative? Jindal threatened vetoes of straight-up tax increases, so lawmakers had little choice but to go to business taxes by suspending exemptions and other breaks.
Further, it’s a misleading statistic: Tax breaks are often locked up in the Louisiana Constitution, meaning that the cuts could only be made where lawmakers have the authority to do so. Among discretionary breaks, “incentives” have to bear some of the cost. Legislators had to be find suspensions that would generate immediate revenue.
And even so, many of these incentives remain among the most generous in the United States.
The One Acadiana paper on economic development is only the first in a series this fall that will address significant issues facing its region. Those will include observations on transportation, public education and workforce development. All critical, and constructive thinking about the state’s agenda is more relevant than ever to Acadiana’s prospects in a time of growth generally, but also a time of adversity in the oil patch.
Yet it’s important to remember that whining about the loss of tax breaks does not constitute leadership, but instead followership, a corporate strategy that benefits selected industries instead of the state’s business climate as a whole.
A lobbyists’ dream of loyalty endlessly rented cannot be the limits of an economic development strategy, for Acadiana or the state.
Lanny Keller is an editorial writer for The Advocate. His email address is firstname.lastname@example.org.