The 2015 legislative session may not go down in history as the single-worst session for the state’s business community, but it was one of the worst, according to business leaders who weighed in on the recently-ended session this week.
In a recap of the six-week session, which ended June 11, the Baton Rouge Area Chamber says bills passed to help balance the state’s $1.6 billion budget shortfall have set the state’s business climate back and decreased Louisiana’s overall competitiveness.
“The best we can say is the Legislature increased business taxes less than the governor sought to do,” says the BRAC Legislative Review. “While some positive steps were taken and some much worse outcomes were avoided … describing the session as a missed opportunity would be an exercise in understatement.”
Louisiana Association of Business and Industry President Stephen Waguespack put it this way: “You’re talking about $2.2 billion over five years that will be falling primarily on the backs of business. By no means can you call that a successful session.”
The biggest problem with the session, from the business community’s perspective, is a series of legislation that reduces business tax credits, exclusions and rebates. Among other things, those bills will cut the digital interactive media and software tax credit, angel investor tax credit and the inventory tax credit. They also will cap the motion picture tax credit at $180 million a year for the next three years, gut the solar tax credit program, reduce the Corporate Headquarter Relocation Program rebate and limit which businesses are eligible for participation in the Enterprise Zone program.
Also in the wake of the legislative session, the state’s CPAs and tax attorneys are breathing a sigh of relief that some of the language in bills affecting corporate taxes was amended in the final days of the session before the bills passed. Still, the final version of the measures only partially addresses problems that had them concerned, and they say corporate taxpayers are in for a headache.
“It’s better, but it’s still a mess,” says Ronald Gitz II, executive director of the Society of Louisiana CPAs.
At issue are the dozens of bills that roll back business tax credits, exemptions, deductions and rebates. Originally, those bills were to become effective July 1, regardless of the tax year to which a tax return relates. As a practical matter, that would have meant taxpayers who filed for an extension on their 2014 state tax return would have faced a higher tax liability if they filed their return after July 1 than if they did so before then.
Here’s a rundown of some of the other top stories making headlines in Daily Report this week:
- The state construction budget approved by the Louisiana Legislature in the final days of the session contains $13 million for the ambitious project to restore the LSU lakes, but that’s less than one-third of the $40 million that had been requested by the Jindal administration and the Baton Rouge Area Foundation, which is spearheading the restoration effort. Perhaps more significantly, none of the funds budgeted for the project are in the priority one category—the only category for which funds are guaranteed this fiscal year.
- A public hearing has been set for Tuesday, July 14, on a Texas-based company’s proposed barge cleaning facility to be located on the Mississippi River near BREC’s Farr Park Equestrian Center. Concerns about the facility—which Port Arthur-based Tubal-Cain Marine Services officials say they’ve been working to locate at 6800 River Road for more than a year—first arose in February when a Riverbend homeowners’ association was notified that DEQ was conducting a permit review of the project.
- A business plan to help determine the future of the beleaguered East Baton Rouge Redevelopment Authority will be unveiled in early July, and consultant Christel Slaughter, who is working on the plan, says the document will contain several different options and possible funding sources for the agency. The plan also will make clear that Baton Rouge needs the RDA, Slaughter says.
- New jobs data from the final quarter of last year show employment in the Baton Rouge metro area increased by 2.9% during the three months that ended Dec. 31, 2014, compared to the same quarter in 2013. That outpaced job growth of 1.9% statewide during the quarter, during which a total of 1,920,642 Louisianans were employed, up from 1,915,384 in the final quarter of 2013.
- Speaking to the Rotary Club of Baton Rouge, LaPolitics publisher Jeremy Alford said Gov. Bobby Jindal was the biggest winner of the session because he accomplished his top priority: balancing the budget without technically raising taxes or drastically cutting higher education. The biggest loser of the session, Alford said, are Louisiana businesses.
- The Louisiana Workforce Education Initiative is bringing on some of the country’s best-known marketing experts to spearhead a media campaign and grassroots communications effort designed to change negative perceptions about a technical education career path. LWEI—which was formed in early 2014 by state business leaders to address the need for more and better-trained skilled workers—has retained the services of The Purpose Institute, an Austin, Texas-based brand engagement and creative services firm founded by marketing guru Roy Spence, best known for founding the marketing firm GSD&M.
- Baton Rouge-based technology services firm Gage reached an agreement to acquire Mid State Telephone of Pearl, Mississippi. Gage officials say the acquisition is a “natural progression” for the company, which over the past 35 years has grown from a small telephone provider (then named Gage Telephone) to a full information technology firm with business clients across the Gulf South. Financial terms of the deal were not disclosed.
- Bernhard Capital Partners acquired two business segments of Houston-based Willbros Group, the companies announced this morning. Along with acquiring Willbros’ Heater Engineering, which is based in Tulsa, Oklahoma, Bernhard Capital is also picking up its Baton Rouge-based Downstream Engineering. Financial details of the acquisition were not disclosed. With the finalization of the deal, Downstream Engineering will remain in Baton Rouge and be rebranded as Wink Engineering—as the company was known prior to being acquired by Willbros in 2009.
- Executives from the Baton Rouge Area Chamber and GNO Inc. spent the week together in Germany on a joint recruiting trip, which the groups say is an example of regional cooperation that would have been unthinkable a decade ago. The team, which also includes representatives from Louisiana Economic Development and Entergy Louisiana, are marketing the southeast Louisiana chemical corridor to European chemical engineering and processing companies gathered at a week-long trade fair in Frankfort called ACHEMA.
- Our Lady of the Lake has purchased a former restaurant space on Burbank Drive, near the intersection of Gardere Lane, on which the hospital plans to build a new clinic. Sale documents show OLOL paid $850,000 for the building at 9405 Burbank Drive, which was formerly home to J&C Buffet. Hospital spokeswoman Kelly Zimmerman says a timeline on the clinic development and other details are not yet available.
- Local health care executive Lloyd Ruffins, brother of famed New Orleans trumpeter Kermit Ruffins, is bringing a live music club to downtown Baton Rouge. Ruffins Downtown Daiquiri Lounge will open Friday at 602 Main St. in the space previously occupied by Club Coco Bongo, which closed earlier this spring. As its name implies, Ruffins’ establishment will be a daiquiri bar as well as a music venue.
- Woody Harrelson will be the next Hollywood actor to portray former President Lyndon Baines Johnson, in a production that will bring filming to Baton Rouge later this year. LBJ will be directed by Rob Reiner, with filming to begin in September. Along with Baton Rouge, the movie also will be shot in New Orleans, Dallas and Washington, D.C.
—Steve Sanoski
