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Archive for the ‘Exemptions, Incentives’ Category

More than a century ago, in 1912, Theodore Roosevelt, after a break with his friend and successor to the presidency, sought a then-unprecedented third term after a four-year absence from the political arena. In the process, he challenged Republican William Howard Taft’s re-election. Both men would ultimately lose to Woodrow Wilson.

But it was something that Roosevelt said in seeking to wrest the Republican nomination from Taft before breaking away to form the short-lived Bull Moose Party that resonates as clearly today as it did 105 years ago.

Doris Kearns Goodwin’s 750-page book The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Gold Age of Journalism is a great read and was a Pulitzer Prize-winning book that chronicles the close friendship between the two men, the exposés of several top magazine writers of the day, and the eventual split between Roosevelt and Taft.

Roosevelt who earned the title of trustbuster during his seven years in office (he succeeded William McKinley, who was assassinated in his first year in office), took on the meat packing industry, big oil, the railroads, and Wall Street banks in an effort to stem what he considered an alarming trend toward consolidation, mergers and monopolistic practices. He railed against the grossly unsanitary meat packing plants as exposed in Upton Sinclair’s novel, The Jungle, and he championed the economic plight of the working poor.

He also opposed child labor and fought for an eight-hour work day for women, for women’s right to vote, for worker protection, and for worker retirement benefits—ideas considered radical in his day but accepted today as the norm.

In 1912, he continued his onslaught, Kearns-Goodwin wrote, again taking on the special interests when while acknowledging that “every special interest is entitled to justice,” he said “not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office.”

He advocated driving the “special interests out of politics” by enacting laws to forbid corporations from directly funding political objectives.

Does any of this sound vaguely familiar? Does it sound as though he might have opposed the U.S. Supreme Court’s 2010 Citizens United decision?

Fast forward to 2017 and the State Capitol in Baton Rouge.

Baton Rouge Advocate reporter Tyler Bridges did a masterful job in a Wednesday STORY that illustrated just how the tail wags the dog when it comes down to attempts to come up with a revenue plan that makes sense when the interests of big business and industry are pitted against those of the citizens of this state.

In his story, Bridges reported how the Republican-dominated legislature was so overtly beholden to the Louisiana Association of Business and Industry (LABI) that even one of its own, Republican State Rep. Kenny Havard of St. Francisville, was appalled and embarrassed—and said so.

Please understand that I am in no way defending or condemning the tax plan put forth by Gov. John Bel Edwards but suffice it to say the business-oriented mindset of lawmakers were going to see to it that nothing that cost business a red nickel was going to pass even if it meant Louisiana households were going to be saddled with higher taxes—and because of the actions of the House Ways and Means Committee, they now will be.

Bridges did one of the best jobs ever in revealing how legislators simply lack the courage, principles, integrity, honesty and, yes, the stones, to turn their backs on campaign contributions and other perks in order to do the right thing.

Too weak-willed to resist the temptation when the think no one is looking, they would rather accept campaign contributions and expensive dinners than to say, “No thanks, I would rather look out for the interests of my constituents.”

Those campaign contributions come from various corporate entities and from corporate officers of countless corporations from both within and outside the state and they are poured into the campaigns of lawmakers for one reason: to buy votes. To claim otherwise would be to be disingenuous, deceptive, and hypocritical.

And just to make sure they get the message, hordes of lobbyists descend on the Capitol like so many swarms of locusts every spring. They are there to remind representatives and senators, lest they have momentary memory lapses, how to vote on any number of bills where there might be a conflict between responsible legislation and the status quo of political favoritism. That’s why on any given night during the legislative session, you can find lawmakers dining at Baton Rouge’s finest restaurants, courtesy of the hundreds of lobbyists who, in turn, feast on the carcasses of bloated legislators. If not restaurant fare, there are always the crawfish boils in the parking lot of the Pentagon Barracks across the street from the Capitol.

The committee not only rejected Edwards’ tax plan but also that of a special blue-ribbon that examined the state’s tax code last year and made recommendations based on its findings.

Bridges quoted Havard, who said, ““If we don’t have the courage to do it now, for God’s sakes… let’s just keep what we’ve been doing for the past 20 years. Isn’t that the definition of insanity—keep doing the same thing over and over and expecting different results? We’re not going to get different results. The only mistake I made was thinking you could make change … The whole system is set up against change.”

So now, Louisiana businesses and industries will continue to enjoy the same tax breaks, exemptions and credits perpetuated for years and ramped up by Bobby Jindal. Meanwhile, the burden, as always, will fall onto the backs of middle class Louisianans.

And the legislature will continue its annual struggle with the budget and the state will keep right on lurching down the road trying to contend with midyear cutbacks as revenue shortfalls continue and roads and bridges and physical facilities at colleges and universities fall farther and farther behind on desperately needed maintenance and as governmental services to the developmentally disadvantaged and the mentally ill continue to be cut—all so business and industry may never be called upon to help shoulder its share of the burden—and so the legislative perks may continue unabated.

Abraham Lincoln’s Secretary of War Simon Cameron would love Louisiana politics. It was Cameron who said, “An honest politician is one who, when bought, stays bought.”

Well, you can rest easy tonight in the knowledge that, by that measure, we have one of the most honest legislatures in the nation. They stayed bought and they will continue to reap campaign contributions and they will continue to shove expensive food and liquor down their gullets, courtesy of the special interests, namely LABI and its members.

Voting in favor of the bill by Rep. Rob Shadoin, R-Ruston, were Reps. Chris Broadwater, R-Hammond; Joseph Bouie, D-New Orleans; Jimmy Harris, D-New Orleans; Robert Johnson, D-Marksville; Marcus Hunter, D-Monroe; Ted James, D-Baton Rouge; and Major Thibaut, D-New Roads.

And, oh, in the interest of full disclosure, here are the names of those who killed Shadoin’s bill in order to keep corporate taxes down and your taxes high (and to allow themselves to continue receiving corporate campaign funds and to keep eating at Ruth’s Chris and Sullivan’s Restaurants, compliments of the lobbyist at the end of the table) were:

  • Alan Seabaugh, R-Shreveport (seabaugha@legis.la.gov);
  • Barry Ivey, R-Central (iveyb@legis.la.gov);
  • John “Jay” Morris, R-Monroe (morrisjc@legis.la.gov);
  • Jim Morris, R-Oil City (larep001@legis.la.gov);
  • Dodie Horton, R-Haughton (hortond@legis.la.gov);
  • Paula Davis, R-Baton Rouge davisp@legis.la.gov);
  • Clay Schexnayder, R-Gonzalez (schexnayderc@legis.la.gov);
  • Phillip DeVillier, R-Eunice (devillierp@legis.la.gov);
  • Stephen Dwight, R-Lake Charles (dwights@legis.la.gov);
  • Mike Huval, R-Breaux Bridge (huvalm@legis.la.gov);
  • Julie Stokes, R-Kenner, candidate for State Treasurer (stokesj@legis.la.gov).

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All those rabid LSU fans who find themselves in the unusual position of backing a team virtually buried in the 19th position among AP’s football elite can take heart; at least the Tigers aren’t 44th.

And those equally insane ‘Bama fans looking to secure another crystal football for their school’s trophy case can be glad the Tide isn’t ranked 46th.

As both teams head into their respective post-season games, 24/7 Wall St., a research firm that publishes some 30 ARTICLES per day on economy, finances, and government, has come out with its rankings of the best- and worst-run states in the country.

And it ain’t pretty.

Alabama is no. 46 out of 50 states but that’s okay. Never mind that it is one of the poorest states in the nation with 18.5 (5th highest) of its citizens living in poverty). The Tide is in the playoffs for the national championship.

Don’t worry about the state’s unemployment rate of 6.1 percent, which is tied for 8th highest in the country. Alabama, which proclaims itself to be the Heart of Dixie, pays the coaches of its two major college football teams, ‘Bama and Auburn, combined SALARIES of $11.67 million—$4.73 for Auburn’s Gus Malzahn and $6.94 million for ol’ Nicky Boy.

(Les Miles, before being unceremoniously cut loose by LSU’s Athletic Director Joe Alleva, himself the possessor of somewhat dubious talent, was pulling down a cool $4.3 million per annum. But all of these salaries pale in comparison to Jim Harbaugh’s $9.004 million salary at Michigan.)

LSU, meanwhile, is headed to this Friday’s Citrus Bowl in Orlando to take on the juggernaut Cardinals of Louisville—without the services of Leonard Fournette who has played his last game for the Tigers. (On that note, now that Fournette has declared himself draft eligible, retained an agent and opted not to participate in Friday’s game, has he, or any other player deciding to go pro, also opted out of attending classes for the remainder of the semester as well? If not, are any of them continuing to reside in free housing, enjoying free meals or using school training equipment for workouts? Just a thought.)

Meanwhile, back home, Louisiana ranks as the 44th best-run (or the seventh worst-run) state, just two notches ahead of Alabama. The two are sandwiched around Kentucky in the rankings while the state geographically wedged between them, Mississippi, is ranked 47th best, or fourth-worst with the fifth-highest unemployment rate at 6.5 percent and the highest poverty rate at 22.0 percent.

Louisiana’s unemployment rate of 6.3 percent (sixth-highest, right behind Mississippi) and its third-highest poverty rate of 19.6 percent (New Mexico’s 20.4 percent is second-highest) are nothing to brag about. Nor is its $4,067 debt per capital (16th highest).

The question, at least in Louisiana’s case, is: Why?

  • Louisiana has some of the highest crude oil and natural gas reserves in the nations;
  • Louisiana is one of the top crude oil producers in the country;
  • More crude oil is shipped to the Louisiana Offshore Oil Port (LOOP) than to any other U.S. port;
  • Louisiana has several of the nation’s largest ports with exports totaling $10,530 per capita in 2015, second highest of all states, behind only Washington;

So with this abundance of natural resources, why is it that Louisiana continues to struggle with high poverty, low educational attainment and high violent crime.

Well, for starters, you can tie the first two of those to the third: high poverty and low education rates equal high crime. Every time.

All that notwithstanding, however, the overriding question is how can a state with such an abundance of the world’s most valuable commodity fail to profit?

Market news has been replete with stories lately about how the poor oil companies are taking hits with some reporting net profits down by as much as 37 percent. Still, even with lower earnings, some, like SHELL, reported net profits of a paltry $2.24 billion for the second quarter of 2016. That’s three months’ profits, folk. Three months.

Yet, Louisiana continues to give away the store to big oil through more than generous tax breaks while allowing them to walk away from the ravages they have inflicted on our coastal marshes.

With so much revenue derived by the oil and chemical industries through these tax breaks, there is no reason why this state’s citizenry continues to wallow in the depths of financial despair and desperation.

With a more reasonable tax structure in which big oil, big chemical plants, and their related industries (ports, trucking, and rail) could be asked to bear more responsibility for wrecking our coastline, polluting our air and water, and tearing up our highways, Louisiana could forge ahead of most of those states ranked ahead of them.

Yet we continue to place the greatest burden on the backs of those who can least afford it: the middle and low income groups through the most inequitable form of taxes. Louisiana has the third-highest average (9.01 percent) in state and local SALES TAXES in the nation.

Ever wonder why that is? For starters, the average taxpayer doesn’t have the time or resources or a PAC to generate organized opposition to this rigged tax structure or to purchase legislators’ votes. Big oil, Big Pharma, and Big Banks do.

Do you think it was sheer coincidence that former State Sen. Robert Adley was appointed by Gov. John Bel Edwards as Executive Director, Louisiana Offshore Terminal Authority? http://gov.louisiana.gov/news/governorelect-edwards-announces-cabinet-executive-staff-bese-board-appointments

Think again. Here is LouisianaVoice’s overview on why Big Oil has the influence it exercises in this state: https://louisianavoice.com/2016/08/28/ag-jeff-landry-joins-jindal-legislators-in-protecting-big-oil-from-cleanup-responsibility-follow-the-money-for-motives/

(Be sure to click on Copy of Campaign Contributions)

But at least the NCAA playoffs and the Citrus Bowl—and national signing day—will keep the natives content for a while longer.

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Good Jobs First, a Washington, D.C.-based national policy resource center, has released an extensive study entitled Megadeals: The Largest Economic Development Subsidy Packages Ever Awarded by State and Local Governments in the United States.

Louisiana, with giveaways totaling $3,169,600,328, ranked sixth behind New York, Michigan, Oregon, New Mexico and Washington in the total dollar amount of so-called megadeals, the report shows, $65 million more than much-larger Texas, which had $3,104,800,000.

Louisiana, with 11, tied with Tennessee for fifth place in the number of such budget-busting deals behind Michigan’s 29, New York’s 23 and 12 each for Texas and Ohio.

The report, authored by Philip Mattera and Kasia Tarczynska, is somewhat dated in that it was published in 2013 but it still offers some valuable insights into how states, Louisiana in particular, was more than willing to give subsidies worth millions upon millions of dollars to corporations in the name of new jobs that rarely, if ever, materialized.

The subsidies included in the report, it should be noted, do not include tax incentives, which is another type of inducement. Accordingly, Wal-Mart, which has received more than $1.2 billion in total taxpayer assistance, is not included because its deals were worth less than $75 million each. Good Jobs First has documented giveaways to Wal-Mart in a separate report.

The single biggest example of corporate socialism contained in the report is the 30-year discounted-electricity deal worth an estimated $5.6 billion given by the New York Power Authority to Alcoa. In all, 16 of the Fortune 50 corporations (excluding Wal-Mart) were included as recipients of the report’s megadeals.

The biggest single deal for Louisiana—and the fifth-biggest overall—was the $1.69 billion subsidy in 2010 for Cheniere Energy in the form of property tax abatements and other subsidies for the Sabine Pass natural gas liquefaction plant. That project, the report said, created 225 new jobs—a cost to the state of more than $7,500 per job, the largest single cost-per-job project contained in the report.

Shintech, received a 2012 deal worth $187.2 million in subsidies to the company. That project was said to have created 50 new Louisiana jobs at a cost of $3,744 per job.

One of the biggest recipients of governmental largesse since the year 2000 has been General Motors with more than $529 in subsidies nationwide. Yet, it was General Motors who pulled up stakes pulled up stakes in 2012, leaving upwards of 3,000 former employees without jobs.

The megadeals cited by Good Jobs First in its report were dwarfed, however, by the seemingly insane subsidies given to banks and investment firms since 2000.

Of the top 21 recipients of bailouts by the federal government, the smallest was that of a company most probably never heard of: Norinchukin Bank, a Japanese cooperative bank serving more than 5,600 agricultural, fishing and forestry cooperatives from its headquarters in Tokyo—and it received $105 billion (with a “B”).

That’s nothing when compared with the heavy hitters. In all, 12 foreign corporations received loans, loan guarantees or bailout assistance from a generous federal U.S. government, led by the $942.7 billion received by the United Kingdom’s Barclays.

But Barclays ranked only fifth in terms of subsidies received in the form of federal bailouts:

Consider, if you will, the top four:

  • Bank of America $3.5 trillion;
  • Citigroup $2.6 trillion;
  • Morgan Stanley $2.1 trillion;
  • JPMorgan Chase $1.3 trillion.

All of this, of course, was the direct result of deregulation pushed by a congress whose members were supported by generous campaign contributions from CEOs, officers and stockholders of those very firms.

And yet we have elected officials—and citizens—who dare to rail against so-called welfare cheats, the costs of illegal immigrants, and the costs of health care for the poor.

These are the same people who wring their hands at the cost of social programs yet justify the expenditure of billions of dollars per day in military contracts to campaign contributors to support wars with no apparent objective (other than political payback) and with no end in sight.

These are the same ones who look us in the eye and tell us they support free market capitalism.

But pure capitalism doesn’t give away the public bank in order to entice some company that was probably coming to your state anyway. After all, if Louisiana truly has all these rich oil and gas deposits (and it does), does anyone really believe the oil and gas companies are going to locate their refining plants and pipelines in Idaho in order to mine for Louisiana’s resources?

You can check that box “no.”

What is the logic behind subsidies to lure an industry just so it can exploit cheap labor? Wouldn’t it be smarter to invest in public education and higher education so that our citizens might be capable of demanding higher wages for their knowledge and skills? Why would we opt to perpetuate the cycle of poverty by sacrificing taxpayer dollars to the advantage of some faceless corporation who cares not one whit for our citizens?

Free market capitalism doesn’t reward corporations with these kinds of subsidies while the recipients are simultaneously sending job oversees, depriving Americans of job opportunities.

Pure capitalism would dictate that each and every business in America succeed or fail on its own merit, without having to depend on governmental handouts.

Anything else has to be considered as something akin to (gasp) ….socialism.

But insisting on capitalism for the poor and socialism for corporations and the wealthy is a formula for disaster if ever such formula existed. The two philosophies are simply not compatible

And you will never get that lesson from the disciples of Ayn Rand.

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Less than three months ago, on June 24, Gov. John Bel Edwards signed an executive order in which he mandated more scrutiny over how significant industrial property tax breaks are doled out to manufacturers. http://www.nola.com/business/index.ssf/2016/06/john_bel_edwards_signs_executi.html

Theoretically, the order gave local governments that would lose out on property taxes a say in approving exemptions for heavy industry, and companies applying for five-year renewals of five-year tax breaks totaling $11 billion would be required to prove the breaks would create and/or retain jobs.

But the Commerce and Industry Board may be trying an end run around Edwards’ order.

The board waited until late Friday afternoon (one of Bobby Jindal’s favorite tactics of making announcements as the week’s news cycle winds down) to give public notice of a Monday board meeting during which it is scheduled to vote on redirecting millions in local property tax revenue from disaster-affected parishes to corporate tax exemptions, without any input from the local bodies losing that revenue.

One of the exemptions to be voted on Monday would “renew” an exemption for Georgia Pacific, a Koch brothers company, costing East Baton Rouge $1.9 million in property taxes.

Exemptions are costing $16.7 billion in lost property tax revenues to local governments, schools and law enforcement, according to the nonprofit Together Louisiana, which will hold a press conference to oppose the proposed exemptions Monday at 9:15 a.m. prior to the 10 a.m. board meeting. http://togetherbr.nationbuilder.com/about

The board meeting will be held in the LaSalle Building at 617 North Third Street in Baton Rouge. The Together Baton Rouge press conference will be held in front of the LaSalle Building.

The exemptions being voted on at Monday’s meeting are being considered in direct violation of Governor John Bel Edwards’ Executive Order issued, and “effective immediately,” on June 24th, 2016, which stated that no future industrial tax exemptions would be approved without the consent of the local governmental bodies — school boards, sheriffs, municipalities and parish governing authorities — whose tax revenue was at stake.

No public hearings, public deliberations or local votes have taken place on any of these proposals, despite the clear requirement of the Edwards executive order. Here is the full agenda for Monday’s board meeting: http://www.opportunitylouisiana.com/docs/default-source/boards-reports/MeetingCategory/louisiana-board-of-commerce-and-industry/9-12-16-c-amp-i-board-agenda.pdf?sfvrsn=0

 

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Regular readers of this site know our disdain for the undue influence of lobbyists and special interests over lawmakers to the exclusion of the very voters who elected those same lawmakers to represent them and their best interests.

Our opposition to political decisions made with priority given to campaign contributions over what is best for the state is well-known—and uncompromising. Money should have no place—repeat, no place—in political decisions.

Unfortunately, we know that is not the case. Politicians for the most part, are basically prostitutes for campaign funds and those who choose to remain chaste usually find themselves at a serious disadvantage come election time.

To that end, you can probably look for State Rep. Jay Morris (R-Monroe) to attract strong opposition when he comes up for re-election in 2019. And that opposition, whoever it might be, is likely to have a campaign well-lubricated by the Louisiana Association of Business and Industry (LABI), the Louisiana Chemical Association, and the oil and gas industry.

At the risk of belaboring the obvious, we have gone on record on numerous occasions as saying the voters are merely pawns to be moved about at will by big business in general and the banks, pharmaceutical companies, Wall Street and oil companies in particular. It is their money that inundates us with mind-numbing political ads that invade our living rooms every election year telling us why Candidate A is superior to Candidate B because B voted this way or that way and besides, good old Candidate A has always had the welfare of voters uppermost in mind.

The presence of that influence was never more clearly illustrated than in Tyler Bridges’ insightful story in Friday’s Baton Rouge Advocate. http://theadvocate.com/news/15225624-78/la-legislative-staffers-sort-out-changes-added-at-the-last-minute

In the very first paragraph of his story, Bridges wrote that a secret deal between Senate President John Alario (R-Westwego), House Speaker Taylor Barras (R-New Iberia) and lobbyists for LABI and the Louisiana Chemical Association.

We won’t bother to re-hash the details of that meeting and the agreement finally reached just before the closing minutes of the recent special session. You can read the details in the link to the Bridges story that we provided above.

But suffice it to say had it not been for Morris digging his heels in and threatening to kill his own bill when he learned of a manufacturing tax break that had been added to his bill, HB 61 that aimed at eliminating exemptions and exclusions on numerous sales tax breaks. Though a Republican, Morris feels that big business isn’t paying its fair share of taxes.

“I was not aware of the deal,” Bridges quoted Morris as saying. “I was not invited.”

Neither, apparently, were any spokespersons for consumers, organized labor, teachers, or the citizens of Louisiana.

Oh, but you can bet LABI President Steve Waguespack was invited to a meeting in Alario’s office earlier in the day, as was Louisiana Chemical Association chief lobbyist Greg Bowser.

Given that, we would like to ask Sen. Alario and Rep Barras why no one representing the people were invited to that little conclave. And don’t try to tell us that the Senate President and House Speaker were representing the people. You were not. You were representing the vested interests of the chemical industry and big business. Period.

Sen. Alario, Rep. Barras: the people of Louisiana are far more deserving of a place at the table in some furtive backroom meeting than LABI and the chemical association.

Either all factions are invited in or no one is. The playing field should be level.

By not excluding lobbyists or by not inviting those on whose shoulders are placed the greatest burden, the ones who placed you in office, you have not just failed at your job; you have failed miserably.

Our late friend C.B. Forgotston would have said of the meeting which produced that secret deal: “You can’t make this stuff up.”

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