With concern growing over the Louisiana’s projected $1.4 billion budget shortfall for the coming year and the catastrophic cuts that could result for higher education, many lawmakers are eyeing some of the tax breaks the state awards annually to businesses as economic development incentives.
But Louisiana Association of Business and Industry President Stephen Waguespack says his organization will challenge efforts to roll back tax incentives and will focus instead on trying to reform the way that state spends its dollars. Waguespack notes the state’s economy is thriving and projected to grow stronger, with activity related to the anticipated industrial construction boom.
“We shouldn’t be so fast to overlook a growing private sector,” Waguespack says. “A dollar in the private sector is still a dollar in Louisiana, just because it’s not in state government. You want money in the private sector. You don’t want a lot of money sitting around in the state treasury that they can spend.”
Waguespack notes the state’s budget has grown by more than 52% over the past decade—from $16.8 billion in 2004 to $25.6 billion today. Though all state budgets increased during that period, Louisiana’s growth was higher than the national average in large part because of the influx of federal recovery dollars following hurricanes Katrina and Rita.
“If you had said 10 years ago that state spending would increase by $1 billion a year it would have seemed unbelievable,” he says. “We grew too fast. What we’re going through now is some rightsizing.”
LABI will be pushing for reforms related to state spending, such as giving colleges and universities more autonomy over budgeting, tuition and procurement.
“We have to empower higher education leaders to do their jobs,” he says. “I don’t know why the state has to micromanage them.” —Stephanie Riegel