By LED’s count, Louisiana recorded nearly $6.8 billion in tax expenditures in the 2010-11 fiscal year. Some analysts have called this motley collection of 468 credits, rebates and exemptions the state’s “hidden budget.” While often described as “tax breaks,” many tax expenditures are perhaps better understood as spending: You do something government likes, and government writes you a check. In flush times, the state’s hidden budget seldom is debated by lawmakers or scrutinized by the media. But in the world we live in today, it’s hard to sacrifice nearly $7 billion without anyone complaining. While few tax expenditures get as much attention as the now infamous 2009 credit for vehicles that burn “alternative fuel”—which has since been rescinded by Gov. Bobby Jindal, but could still end up costing the state as much as $200 million a year—they all mean something to someone. But what they mean to the state, good or bad, is often hard to measure. Nonetheless, that’s what a group of legislators is trying to do. The 14-member Revenue Study Commission has begun reviewing all tax expenditures and is to provide suggestions to their fellow legislators by Feb. 1. State Sen. Dan Claitor, a Baton Rouge Republican and commission member, says he’s not on the hunt for more revenue. He just wants to know if the state is getting a good return on its investments. “I’m not going on a gold-prospecting mission,” he says. “I’m going on more of a stock-picking mission.” Read the rest of the new Business Report cover story by David Jacobs here.
Today’s poll question: Do you think eliminating a tax credit, rebate or exemption amounts to a tax increase, as some politicians claim?
