By any objective viewpoint, it’s hard to reach Dan Fagan’s conclusion that Louisiana is “chasing business away” (The Advocate, March 10).
Since January 2016, Louisiana has won 128 economic development projects securing 27,000 new jobs and 21,000 retained jobs. New capital investment for these projects exceeds $33 billion.
In 2018, the state secured 47 major economic development projects in 31 different parishes, from West Carroll to Calcasieu and Caddo to Plaquemines. The past month yielded a 200-job tech expansion in Lafayette, a 75-job ATV project in Shreveport and a nearly $500 million manufacturing expansion in Baton Rouge. An international helicopter project celebrated its arrival in Lafayette one day before Fagan’s column.
That’s hardly a picture of “politicians who go to war with our state’s job creators.”
Yes, this administration entered office facing a $2 billion deficit left by its predecessor. A difficult choice was made, with the majority of the Legislature agreeing, to temporarily raise sales taxes rather than further gut Louisiana’s health care and higher education systems.
Fagan cherry-picked one table from a report by a major accounting firm and made a sweeping conclusion about the state’s business tax climate. Had he listened to one of our most respected economists, LSU’s Jim Richardson, speak at the Feb. 21 Louisiana Statewide Business Summit, Fagan would have learned that one table presents an incomplete story.
Louisiana will have one of the nation’s biggest business tax declines in an upcoming year, due to the 2018 drop in sales taxes, Richardson said. Changes in corporate deductions combined with a stable fiscal situation through 2025 mean, “We have a much better tax system now than we did three years ago,” he noted.
Another table in the same Ernst & Young report shows Louisiana businesses shoulder 40 percent of all state taxes in Louisiana, while Texas businesses are burdened with 58 percent of all state taxes — another fact lost on Fagan.
Cherry-picked statistics, used misleadingly, ignore the reality that the effective business tax rate in Louisiana is 4.7 percent, just 0.2 percent higher than the national average. The same Ernst & Young study for the prior fiscal year showed Louisiana with a negative 3.6 percent growth (or decline) in business taxes while the national average rose 0.9 percent.
Louisiana’s stable revenue picture is welcome news for Louisiana’s businesses. At least for the next seven years, as Richardson points out, “There is some relative stability that we’re going to be able to maintain. And I think that is good. That is good for you as businesses, in terms of what you can expect for your tax bills, and also in terms of public services that are important to your businesses.”
secretary, Louisiana Department of Revenue
secretary, Louisiana Economic Development