Louisiana’s business lobby had a good day Tuesday, when the legislative special session wrapped with a $35 billion budget and the passage of several longtime business priorities—including key tort reform legislation, which Gov. John Bel Edwards has promised to sign into law, and significant tax breaks for businesses, which will cost the state at least $25 million in the fiscal year starting today.
Republican lawmakers brokered a last-minute agreement with Edwards, a Democrat, to rework civil litigation rules to lessen the damage claims that can be awarded in car wreck lawsuits. Proponents argue the move will ultimately lower Louisiana’s auto insurance rates, currently the second-highest in the nation, by making litigation less lucrative.
“This new Legislature is obviously hungry to change Louisiana’s reputation for a poor legal climate and House Bill 57 appears to be simply the first bite at that apple,” LABI President and CEO Stephen Waguespack, whose organization helped craft much of the legislation, says in a prepared statement. “Our work has only just begun.”
However, opponents of the tort reform effort chalk it up to a corporate giveaway that will not only impair injured people’s ability to receive adequate compensation, but not yield its intended results.
“This bill will do nothing to lower insurance rates and will seriously limit the people of Louisiana’s access to justice,” Real Reform Louisiana Executive Director Eric Holl says in a prepared statement. “Now that the tort reform fight is over, it’s time for the Legislature to enact real insurance reform that will actually lower rates.”
Additionally, the Legislature passed a series of tax breaks for businesses, which over the next five years and with some extensions of existing tax breaks will cost the state some $227 million. Despite some pushback from Democrats, who said it did little for workers, Republicans touted the passage of the business tax relief measures as a victory for businesses hurt by the coronavirus pandemic. Legislative analysts, meanwhile, are unsure of what impact the measures will have on the state budget.
Edwards has yet to make clear whether he’ll sign the business tax relief bills.
The legislative wins for business come as little surprise, given that business executives essentially set the session agenda for the Republican-led Legislature. The pro-business Louisiana Economic Recovery Task Force, formed in response to the pandemic, had identified liability related to the virus as one of the greatest obstacles companies face as they plan their return to work. Fourteen bills drafted based on the task force’s recommendations successfully passed through the Legislature.
“The fact that the [task force] was able to come together in the midst of a crisis, immediately come up with ideas for the Legislature, and have those bills introduced, debated, and passed in such a short amount of time is truly remarkable,” said LAER Task Force Chairman Jason DeCuir in a prepared statement. “This would not have been possible without [Senate] President [Page] Cortez, [House] Speaker [Clay] Schexnayder, 62 business leaders from across the state and the many willing legislators who valiantly carried these legislative instruments.”
Exactly two months ago, Cortez and Schexnayder made the unique play of calling themselves into session rather than waiting on the governor to do so, shortly after launching a legislative leadership organization geared toward getting the GOP message out to the public.
