The Louisiana Senate extended a popular tax credit Tuesday that will cost the state at least $75 million a year, but the Senate sidelined for a day three other tax bills that would cost the treasury millions more.
Senate President Page Cortez, R-Lafayette, said afterward that he wants to limit the cost of the additional tax breaks for business to less than $20 million a year.
The tax credit that senators passed would go to investors who restore historic buildings.
“Not all tax credits are created equal. Some we lose money on,” said state Sen. Rick Ward III, R-Port Allen, who handled the bill in the Senate. “This has economic impact and saves buildings that have historic value.”
House Bill 4 must return to the House for approval following the approval of several Senate amendments.
An amendment by Ward capped the cost at $120 million per year to the state, compared to the current estimated cost of $150 million. A separate amendment by state Sen. Bret Allain, R-Franklin, would allow investors and others to claim only $75 million in tax credits the first year, $85 million for the second year and more in later years to reach the $120 million.
“My angst is that when we know there’s going to be a shortfall and we’re going to have a budget crisis of hundreds of millions of dollars, we’re going to have to decide between spending on health care and higher ed,” Allain told senators.
Senators approved HB4, 36-1, with state Sen. Jay Morris, R-Monroe, casting the only no vote.
“Give money to rich people!” Morris shouted from his seat to his colleagues afterward. “Give it away!”
The Senate had three more tax breaks for business on its calendar, but the bills were referred to the Senate Finance Committee for consideration Wednesday. Once passed by the committee, those measures then must win full Senate approval.
All three bills originated in the House before the Senate amended them to reduce their cost.
“We have to make sure we balance the budget,” Cortez said. “We can’t put too much in the way of credits in the budget without taking cash out and putting that on the side to pay for those credits. That’s always a question of do you fund something or do you fund a credit?”
House Bill 11 would allow businesses to retain a slightly larger portion of the sales taxes that they collect at a cost of $3 million for the treasury.
House Bill 13 would allow hotels, restaurants and retailers to become eligible for investing in supposedly economically depressed areas known as Enterprise Zones. The cost: $5 million in 2021 and growing to $25 million by 2025.
House Bill 19 would extend a tax break program known as Quality Jobs to hotels, restaurants and retailers. The cost $1.6 million per year.
Meanwhile, the House gave final approval to Senate Bill 6, which suspends a portion of the corporate franchise tax for 14 months. The cost: $7.5 million.
The Louisiana Budget Project, a Baton Rouge-based nonprofit with a liberal tint, questioned approving the tax breaks.
“While it is understandable that legislators want to help those affected by the Covid-19 recession, these bills also come at a cost,” the group wrote Tuesday. “They reduce the revenue that otherwise would be available to support our schools, rebuild our roads and bridges and make sure everyone has access to healthcare.”