When it comes to decrying the evils of “corporate welfare,” Gov. Bobby Jindal is the wrong messenger — almost comically so.
Before Jindal embraced the cause in his opening address of the just-completed legislative session, the governor was an avid proponent of tax giveaways offered in the name of economic development. According to a series published last year in The Advocate, the cost of six major business tax breaks doubled on his watch. The jump coincided with the state’s increasingly frantic attempts to find the money to pay for basic services such as health care and higher education.
Jindal’s main proposal for addressing the problem was the wrong vehicle, as well.
The governor asked the Legislature to eliminate the state rebate of the inventory tax that companies pay to localities — at least, the large proportion that exceeds their overall state tax liability. The proposal was crafted to comply with the now-infamous Americans for Tax Reform pledge, on the theory that it wouldn’t be scored as a tax increase.
But Jindal’s contorted logic rammed headfirst into the reality that ending the rebate would have actually increased the companies’ tax bills to the local parishes. So did lawmakers’ first pass at addressing that problem — eliminating the tax entirely — because doing so would have devastated the bottom line of many parishes. In the end, they rolled back the rebate for big businesses by 25 percent and left the question of whether to end the tax entirely, along with the related conundrum of how to make up the lost revenue to localities, for the next governor and Legislature.
Yet, despite Jindal’s cynical and ham-handed approach, he actually had the right message.
And as attention shifts to the fall elections for governor and every legislative seat, a remarkable, overdue consensus seems to be emerging over the need to get Louisiana’s corporate welfare programs under control.
Consider the fact that all four major gubernatorial candidates, politicians who run the ideological gamut from Democratic state Rep. John Bel Edwards to the three Republicans, Public Service Commissioner Scott Angelle, Lt. Gov. Jay Dardenne and U.S. Sen. David Vitter, are all promising to tackle the tax code in a special session as soon as they’re sworn in. The devil will surely be in the details — Dardenne, for example, volunteered during a gubernatorial forum last week that he’s uncomfortable with the $180 million annual cap that lawmakers put on film tax credits — but at least everyone seems willing to consider prescribing some tough medicine.
Many lawmakers appear ready to get serious, as well, once they no longer have to worry about taking care of Jindal’s presidential politics.
The chief outliers, of course, are the big-business interests that had grown quite used to getting their way around the Capitol. The Louisiana Association of Business and Industry did its best to fight off tax increases on its members — which, despite Jindal’s claim of revenue neutrality, is exactly what the Legislature passed — and persuaded lawmakers to at least make various benefit rollbacks temporary.
That wasn’t good enough for business partisans, who are reportedly looking for candidates to challenge lawmakers who voted, however reluctantly, for the major tax measures. The threat is surely making some legislators, particularly those who represent deeply conservative districts, nervous.
Still, based on how they behaved during the session, I’m guessing they were a lot more worried about the prospect of facing voters if they hadn’t found a way to avert huge cuts to already struggling state colleges and medical facilities.
And give Jindal credit for this: As obsessed as he is with national politics, he’s figured out that plenty of voters, from tea partiers to Occupy Wall Street sympathizers, believe the system is rigged in favor of big corporate interests. He’s hardly the only one out there talking about fighting corporate welfare these days.
LABI and other business lobbyists spent years getting what they wanted out of the Louisiana Legislature, and they often still do. Jindal’s right, though. Given the environment, it may a while before they have it that good again.