BATON ROUGE, La. (AP) - Lawmakers who keep hearing job-creation stories from Gov. Bobby Jindal asked the governor’s economic development chief Tuesday to explain why state tax revenue remains largely stagnant.
The questions came as members of the House Appropriations Committee were reviewing the Department of Economic Development’s budget.
Jindal repeatedly says that his administration has attracted business projects that will bring 80,000 new jobs and $50 billion in capital investment to Louisiana.
But Appropriations Chairman Jim Fannin, R-Jonesboro, said the job growth isn’t reflected in state tax receipts.
“Why are we not seeing it?” Fannin asked Economic Development Secretary Stephen Moret.
According to the most recent state income forecasts, corporate income tax is expected to be nearly 17 percent lower this year than what was collected last year, while sales tax is projected to be nearly flat. Income tax revenue has seen modest growth.
“I’m very optimistic when I hear you all talk in the papers,” said Rep. Roy Burrell, D-Shreveport. But he added that he’s not seeing in his community the effects that he hears touted by the Jindal administration.
Moret said Louisiana is outpacing the country in job growth, but he said the state’s growth is limited by the slow recovery of the national economy.
“When the country’s not growing, there’s only so many projects to be able to compete for and so many jobs to be able to compete for,” Moret said.
He also said the use of state tax breaks has grown by $1.5 billion since 2008, siphoning more money from the state treasury. He said most of that growth is in claims for tax exemptions that his agency doesn’t oversee, and he suggested the state needs to better manage the full list of credits and rebates.
“The 5 percent that roughly we manage, I think that most of those incentives have been effective at generating new jobs in Louisiana. Some of them have been effective at generating new revenue in Louisiana. Some of them have not,” Moret said.
The economic development secretary singled out the state’s film tax-break program, with a price tag topping $200 million a year, as having a net cost to the state. But Moret said it has driven creation of a new industry that supports 10,000 jobs in the state.
“It’s obviously a very generous program,” he said.
Lawmakers have talked of reining in the pricey program for film and TV productions. But they’ve rejected such proposals amid opposition from film industry leaders, who say limits on the tax breaks could squelch production in Louisiana and cost the state thousands of jobs.
Also during Tuesday’s budget hearing, Lt. Gov. Jay Dardenne raised an annual concern that Jindal and lawmakers continue to divert dollars earmarked for state tourism marketing to instead pay for other items.
Dardenne is head of the Department of Culture, Recreation and Tourism, which receives a small slice of the state’s sales tax to use for out-of-state advertising and promotion of tourism in Louisiana.
About $25 million is expected to be generated for the department by the tax in the upcoming fiscal year that begins July 1. Jindal’s budget would steer more than $5 million of that to arts grants, the Louisiana Book Festival, the Independence Bowl, the Essence Festival, the Louisiana Sports Hall of Fame, the Louisiana Special Olympics and other events.
Dardenne said marketing brings money to Louisiana.
“We are competitive, but we’re not where we want to be,” he said.
Jindal administration officials have said the state has limited dollars to divvy among priorities, and they said the events and museums paid with tourism marketing dollars are used to draw visitors to the state.
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Online: House Bill 1 can be found at www.legis.la.gov
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