It should come as a surprise to exactly no one that few states dole out more financial incentives in the name of economic development than Louisiana.
After all, writes Business Report Editor J.R. Ball in his new column, why shouldn’t a state government that’s ranked No. 2 in taking money from the feds also be among the league leaders in giving it away?
Louisiana takes from Washington D.C. and gives back to Corporate America. Given the state of Louisiana’s fiscal affairs one might think a free-spending politician or two might wonder about the impact these giveaways have on the budget’s bottom line.
Someone did, and, as it turns out, the answer wasn’t good. Researchers from North Carolina State, using data from the W.E. Upjohn Institute for Employment Research, took a deep dive into all the incentives offered by 32 states, including Louisiana, from 1990 to 2015—which pretty much covers 90% of incentives nationally. What they found is that many of the credits, abatements and tax exemptions led to worse overall fiscal conditions for the state.
In other words, the amount of potential tax revenue exempted to secure a new economic development project or expansion wasn’t always offset by other taxes resulting from the ripple effect of the deal.
Read the full column from Ball about Louisiana’s tax break situation. Send comments to editor@Businessreport.com.
