Posted in Business, Economy, Exemptions, Incentives, Governor's Office, Notable Quotables, Taxes on December 19, 2012| 4 Comments »
“If you’ve got some states doing it, it’s hard for the others not to do it. It’s like unilaterally disarming.”
—Former Illinois Gov. Jim Edgar, on his unsuccessful efforts to rein in the runaway trend toward tax incentives offered by states to lure industry.
Posted in Campaign Contributions, Contract, Contracts, Economy, Exemptions, Incentives, Governor's Office, Jobs, Taxes on December 19, 2012| 3 Comments »
Unless the Revenue Study Commission’s report on the state’s tax structure is destined to become just another government study that gathers dust, it must address one significant fact: that for every dollar in the state’s budget, 21 additional cents is given away in tax incentives, exemptions and credits.
The report is scheduled to be released sometime shortly after the first of the year.
The state, as has been the case the past several years, is facing a budgetary shortfall of about $1 billion for Fiscal Year 2013-14 and the Jindal administration on Friday, Dec. 14., announced another budget cut, this one $166 million—all in health care for the poor.
For the current budget of $25 billion, the state each year gives away almost $5 billion in various tax breaks which range from enterprise zone credits to 10-year property tax exemptions to sales and use tax rebates.
Louisiana corporate and industrial tax incentives were only $59 million as recently as 2001. The surge, of course, translates to less revenue in the state budget but Gov. Piyush Jindal has refused to offset the revenue losses with increased taxes elsewhere, choosing instead to cut services. As a consequence, higher education and health care have incurred devastating cuts.
Put another way, the Jindal administration continues to insist on transferring money from education and health care to businesses.
Louisiana commits $394 for every man, woman and child each year in tax breaks to manufacturers, retail outlets and movie production companies through the Louisiana Office of Economic Development (LED).
Those include:
• LED FastStart, which creates customized employee recruiting, screening and training solutions for eligible companies;
• Angel Investor Tax Credit of up to 35 percent for start-up and expansion investors;
• Digital Interactive Media and Software Development Incentive;
• Enterprise Zone tax credits of $2,500 for each new job created;
• Industrial tax exemption of 100 percent for up to 10 years on new manufacturing investment;
• Motion Picture Investor transferrable tax credit of up to 30 percent;
• Musical and Theatrical Production tax credit of 25 percent to 35 percent;
• Ports of Louisiana investor tax credit program to promote Louisiana ports;
• Quality Jobs program that offers up to 6 percent in rebates on annual payroll expenses for up to 10 years;
• Research and Development tax credits of up to 40 percent to existing businesses;
• Restoration Tax Abatement of 100 percent for five years for rehabilitation of existing structures;
• Sound Recording Investor Tax Credit of 25 percent;
• Technology Commercialization Credit and Jobs Program offering a 40 percent refundable tax credit and a 6 percent payroll rebate for firms that invest in the commercialization of Louisiana technology.
The New York Times recently conducted an extensive investigation into state tax incentives that revealed that Louisiana’s $1.79 billion in business tax breaks ranks 11th in the nation.
Local governments give up $9.1 million per hour ($80 billion per year) in tax incentives to business and industry, according to the Times story.
Movie maker Oliver Stone criticizes subsidies to industries but defends similar subsidies for movie production, the story noted.
Moreover, the $394 per capita cost is eighth highest in the U.S. and the 21-cent cost per state budget dollar is seventh highest in the country.
That $1.79 billion includes $1.61 billion in corporate income tax credits, rebates and reductions and $75 million in property tax abatement.
But one thing the Times story neglected to point out in its report is that the $1.79 billion in corporate tax breaks represents only about 40 percent of the total tax breaks given by Louisiana through other exemptions, including those for hazardous waste disposal, gift taxes, inheritance taxes, sales taxes on alcoholic beverages, tobacco, food and prescription drugs.
Only six other states had a higher ratio of tax incentives to state budget. Texas granted 51 cents per state budget dollar in corporate tax incentives. Following, in order were Nebraska (39 cents), Oklahoma and West Virginia (37 cents), Vermont (31 cents) and Michigan (30 cents).
Not surprisingly, Texas has the most corporate tax exemptions with $19.1 billion.
But Louisiana, like so many other states has plunged headlong into the ever-escalating race for industry and jobs and again, like other states, has placed a tremendous strain on state finances.
The current obsession with tax breaks began with the repeal of the Stelly Plan in Gov. Piyush Jindal’s first few months in office in 2008, a move that has cost the state approximately $300 million per year.
The repeal of the Stelly Plan, according to Jindal, was supposed to save individual taxpayers between $500 and $1,000 per year. But to save $500, a single filer would have to earn as much as $90,000 and joint filers would have to make more than $150,000 a year to save $1,000.
But the revenue losses caused by the ill-advised repeal of the Stelly Plan are dwarfed by the losses to the state treasury that have resulted in corporate tax incentives granted for projects that have produced few or no jobs.
In 2011, for example, the Board of Commerce and Industry approved exemptions totaling more than $2 billion in enterprise zone and property tax exemptions for new and expanded businesses that produced a mere 7,300 jobs, many of those low-salaried jobs.
But not even those comparatively few jobs turn out to be permanent.
• The Ormet Corporation kicked about 200 of its employees in Ascension Parish to the curb in November, only about a year after receiving tax credits worth about $1 million and a performance-based loan of $1.5 million from the state.
• International Paper Co. received more than $55 million in tax breaks while creating only 107 new jobs over the four-year period from 2008-2011. But that did not prevent IP from shutting down its plant in Bastrop in 2008 and another in Minden last May, putting 610 employees out of work.
• The $26.3 million in tax incentives received from the state by General Motors in 2008 and 2009 produced no new jobs and worse, failed to prevent closure of its Shreveport plant which sent 950 workers to the unemployment lines.
• Dow Chemical continued taking tax incentives from the state, even after announcing in 2009 that 2,500 workers would lose their jobs when three Louisiana plants that make ethylene and derivatives would close. Over the four years from 2008 through 2011, Dow accepted $70.3 million in tax incentives that resulted in not a single new job.
That could be because many established plants submit applications for renewals of existing 10-year exemptions, citing plant modernizations or improvements as justification for the continued tax break when in reality, many of the so-called modernization projects involve little more than landscaping, changing a few light bulbs or similar routine maintenance projects.
But even worse is the gnawing appearance of quid pro quo. Many recipients of the state’s generous tax incentives also made generous campaign contributions to Gov. Piyush Jindal.
In all, 29 separate entities received 32 tax exemptions totaling $774 million over the four-year period. Those same 29 have made $135,700 in campaign contributions to Jindal.
Some of the recipients, followed by total tax breaks and campaign contributions to Jindal, include:
• CLECO ($169 million, $14,000);
• Calumet Lubricants ($105 million, $1,000);
• Dow Chemical ($70.3 million, $13,000);
• Exxon/Mobil ($13.3 million, $11,000);
• Century Tel ($24.6 million, $5,000);
• The Coca Cola Co. ($23.9 million, $2,500);
• PPG Industries ($23.2 million, $1,000);
• Marathon Oil ($27.7 million, $11,000);
• Monsanto Co. ($38.7 million, $5,000);
• Conoco Phillips ($37.2 million, $5,000);
• General Motors ($26.7 million, $2,500);
• Stupp Corp. ($25.9 million, $6,000);
• DuPont ($21.3 million, $1,000);
• Select Energy ($14.3 million, $5,000);
• Dynamic Industries ($13.6 million, $5,000);
• General Electric ($11.2 million, $5,000);
• Syngenta Crop Protection ($11 million, $1,000);
• Georgia Pacific ($10.7 million, $4,200);
• Targa Midstream Services ($7.88 million, $5,000);
• Weyerhaeuser ($3.98 million, $5,000);
• Bollinger Shipyards and affiliated companies ($9.36 million, $63,850);
• Chevron ($3.7 million, $1,000);
• Rouse’s Enterprises ($3.48 million, $5,000);
• The GEO Group ($3 million), $5,000);
• Wal-Mart ($2.59 million, $5,000);
• Walgreens ($2.59 million, $5,000);
• Bruce Foods ($2.5 million, $4,500);
• Turner Industries ($2.42 million, $5,000);
• Boh Brothers ($1.76 million, $1,000);
In addition to campaign contributions, which are limited to $5,000 per individual per election cycle, several of the recipients of tax incentives have contributed even more generously to the Supriya Jindal Foundation, established by Jindal’s wife six months after Jindal took office.
Among the contributors are charter members (who give a minimum of $250,000) Marathon Oil, Dow Chemical and Wal-Mart.
Chevron is among the foundation’s Platinum members who pledge a minimum of $50,000.
Posted in Budget, Campaign Contributions, Economy, Governor's Office, Jobs, Layoffs, Revenue, State Agencies on December 19, 2012| 6 Comments »
Get ready, Louisiana taxpayers. If you encounter a need for a one-on-one meeting with a Louisiana Department of Revenue spokesperson to discuss your state taxes in the near future, you soon will be out of luck. You’ll need to juke on down to Baton Rouge or New Orleans to get face time.
Though no announcement has yet been made of a target date, LouisianaVoice has learned that all other state revenue satellite offices are being shuttered.
The closures, of course, will not affect New Orleans where the state is locked into that overpriced lease agreement with Tom Benson as part of the notorious state giveaway to keep the Saints in Louisiana. That’s the deal whereby Benson purchased the old Dominion Tower across from the Superdome with the understanding that the state would move all its New Orleans offices there and pay about twice was it was paying for its former office space.
It was not immediately known how many state employees would be affected, but suffice it to say the timing of the decision, coming as it does a week before Christmas, couldn’t be worse for Revenue staffers in Shreveport, Monroe, Alexandria, Lake Charles and Lafayette.
Having already gone for more than three years without a raise, they now face the prospects of unemployment.
Of course, certain employees have nothing to worry about. The cutbacks will only apply to the grunts, the ones who actually do the day-to-day work, the ones who have to suffer indignities from supervisors and flak from unhappy taxpayers.
This is the same agency, by the way, that hired former State Rep. Jane Smith first as Assistant Secretary at $124,446 despite her professed lack of knowledge about revenue. Upon the firing of Secretary Cynthia Bridges over that alternative fuel tax (a bill authored by smith, no less, and signed into law by Jindal), Smith was briefly promoted to secretary by Piyush.
Jindal later hired former executive counsel Tim Barfield as secretary but circumvented the state law which limited the secretary’s salary to $124,000 by also giving him the title of Executive Counsel of Revenue and bumping his salary up to a cool $250,000.
Of course, it didn’t hurt that Barfield and his wife contributed $15,000 to Jindal’s campaigns in 2006 and 2010 and that one of his former employers, Amedisys, chipped in another $11,000 to the Piyush cause.
And apparently oblivious to the current state hiring freeze, the new secretary promptly went out and bought himself a chief staff in the person of Jarrod Coniglio, who “will take the lead for all of our day-to-day work and be a great help to us as we work to coordinate and execute with the highest efficiency, accuracy and customer service,” according to Barfield.
The price for his new aide that Bridges apparently never saw the need for? $115,003.
While on his shopping spree, Barfield also picked up a new press secretary: Douglas Baker at an annual salary of $105,997.
True to form in the Piyush administration, efforts to contact the newly-appointed Revenue press secretary for more detailed information about the office shut-downs and accompanying layoffs were unsuccessful.
Posted in BESE, Education, Governor's Office, Notable Quotables on December 17, 2012| 4 Comments »
“The coalition of the status quo is going to say my plan hurts teachers and hurts public education. They are going to do whatever it takes to say reform is a bad idea. They are going to argue for the status quo. It’s just the opposite. That type of rhetoric is insulting to the people across this state demanding better schools.”
—Gov. Piyush Jindal, in his Jan. 17, 2011 address to the Louisiana Association of Business and Industry (LABI) during which he unveiled his sweeping reform package for public education. Piyush’s mean spirited rhetoric, in which he trashes teachers as a collective group, now takes on a sinister tone in light of last Friday’s shootings at Sandy Hook Elementary School in Newtown, Connecticut.
Posted in BESE, Education, Governor's Office on December 17, 2012| 9 Comments »
“We are going to create a system that pays teachers for doing a good job instead of for the length of time they have been breathing….”
That statement was contained in the rambling speech Gov. Piyush Jindal gave to the Louisiana Association of Business and Industry exactly 11 months ago today as he unveiled his education reform plan.
Well, Piyush, you no longer have to worry about Victoria Soto monopolizing your precious oxygen supply. You see, Ms. Soto, 27, gave up her life to protect her students, her children, in Newtown, Connecticut last Friday.
And Sandy Hook Elementary School principal Dawn Hochsprung, upon hearing gunshots, charged from a conference room and confronted shooter Adam Lanza. She lunged at him in an effort to protect her students—and paid with her life.
School psychologist Mary Sherlach also attempted to stop Lanza. She, too, was killed.
Mary Ann Jacob, a library clerk at Sandy Hook, was prepared to sacrifice her life as well. She herded her students into a restroom and locked the door and then told her students she loved them—just in case it was the last thing they ever heard. Fortunately, they survived.
“After three years, they are given lifetime protection,” Jindal said in his typically long-winded vilification of teachers to LABI almost a year ago. “Short of selling drugs in the workplace or beating up one of the business’s clients, they can never be fired.”
Piyush, you are a moron, a buffoon, an idiot and as a lifelong citizen of Louisiana, it profoundly embarrasses me to have you as my governor.
There. I’ve said it.
I deliberately postponed writing this for a few days so as to temper my emotions and to write more rationally and calmly. In retrospect, I’m glad; my words are more carefully chosen today.
You see, I’m a little too close to this story to be completely objective (though I have never really laid claim to objectivity). I have three grandchildren who are each six years old, the same age as 16 of those 20 precious children slaughtered last Friday by that monster. Two are twins and the other, their first cousin, is nine days younger. They all attend the same school and I have had nightmares since Friday.
I have close friends who attend my church who are elementary school teachers and they are all heroes. They love their students and their every action at their schools is carried out with sole intent of feeding their students’ fertile minds so as to help them learn and prepare themselves for productive lives. I don’t know a single one of those wonderful teachers who put tenure or themselves ahead of their kids.
My high school teachers likewise were heroes. Two, Charlotte Lewis and Maggie Hinton, somehow saw potential in my writing abilities early on and encouraged me to keep writing. Another was Earvin Ryland. I took three courses under him: U.S. history, civics and geography and he consistently pushed me to do better—and he did it without belittling me or calling attention to my many scholastic shortcomings. Morgan Peoples, Mary Alice Garrett, Coach Perkins, Ruth Johnson, Coach Garner, Coach Garrett—heroes one and all. If some nutcase like Lanza had invaded Ruston High School back then, Coach Moose Phillips would have taken him apart with his bare hands.
And those heroes produced more heroes. Katherine McBride Cox would go on to a sterling career as an educator/principal in her own right; Nancy Garrison would become a university president; Patricia Wells would become a performer with the New York Metropolitan Opera; Bill Higgs would become a world-renowned heart surgeon; Nancy Byrd became a leading pediatrician in Houston; Joel Tellinghuisen would help pioneer the development of laser surgery; Allen Carpenter would excel as a pilot, first in Vietnam and later as a trainer of other pilots. There were others: Jerry Hood, Robert Bretz, Sid Aaron, and Martha Kavanaugh, to name only a few. And those, except for two, are just the ones in my class—the class of 1961. Pat Wells and Nancy Byrd were a couple of years ahead of us.
And to hear this asinine governor disparage such an honorable profession and such noble human beings by telling those fawning LABI supporters that teachers are paid “according to how long they have been on the job, regardless of their performance”—all for the sake of political points—makes my blood boil.
But Jindal isn’t the only one. Jonathan Pelto http://jonathanpelto.com/ writes a political blog similar to LouisianaVoice in Connecticut. Much of his writing has been about one Paul Vallas, former superintendent of the Louisiana Recovery School District (RSD), and now a plague on Connecticut. But Pelto is also familiar with our own Piyush.
Pelto posted a blog today in which he cited politicians from several states, including Piyush, who have a nasty habit of running around attacking teachers for political gain.
A Rhode Island state legislator called teachers “pigs at the public trough.” Had he said such a thing in my presence, I would have done my best, even at age 69, to deck him. How dare he—a “pig at the public trough” in his own right—say such a thing!
New Jersey Gov. Chris Christie has verbally attacked teachers in that state and even in Connecticut, Gov. Dannel Malloy once said that all a teacher need do is “show up for four years” to be given tenure.
I wonder how Gov. Malloy feels today. I wonder if he would be willing to face the families of Victoria Soto, Dawn Hochsprung, Mary Sherlach or perhaps Mary Ann Jacob herself and make such an idiotic statement.
As much as I personally disagree with Louisiana Superintendent of Education John White on the so-called “reforms” he is attempting to implement, he at least had the decency to issue a statement about those horrific shootings last Friday:
“Today’s events in Connecticut are unspeakably tragic. There are no words to capture the grief all who know and love the victims must feel. They are also sobering reminders of the fragile nature of life, especially the lives of children. I urge that superintendents, principals, and school boards continue to be vigilant in maintaining crisis management plans and the preparations necessary to implement them.”
Likewise, U.S. Sen. Mary Landrieu offered her response:
“We are all heartbroken by the senseless shooting today in Newtown, Connecticut. The magnitude of this tragedy is incomprehensible, with so many innocent lives lost. To the families and community of Sandy Hook Elementary – we share in your grief, and hold you up in our prayers.”
Louisiana Association of Educators (LAE) President Joyce Haynes said this:
“As members of the education community, we are deeply concerned for everyone in the Newtown, Connecticut community. We join our entire nation in mourning the deaths of innocent children and educators due to violence.”
Additionally, LAE provided a web link to a guide on how to respond before, during and after such a crisis http://www.neahin.org/blog/school-crisis-resources.html.
As for Piyush and U.S. Sen. David Vitter?
Nothing. Nada. Zilch. Not a peep.
If either has uttered a single word of sympathy for the lives lost in that tragedy, I’ve not seen it. Nor could Google provide a clue to any statement by those two.
It can only be assumed that Vitter is keeping his mouth shut to placate his NRA supporters while Jindal, in his ongoing candidacy for the 2016 presidential nomination, is probably being interviewed by Fox News on how the National Republican Party ought not to be stupid.
Well, Piyush, to fully understand the sacrifices made by teachers—every day—all you need do is ask someone whose life has been changed for the better by a caring, giving teacher who puts the welfare of her students first—some of whom died last Friday doing just that—and others who took it upon themselves to encourage a below-average student 50-plus years ago.
Piyush, I shudder to think what action you would have taken in a situation like that of last Friday. I can almost visualize you quivering and whimpering under a desk, perhaps even wetting your pants, fearful that you won’t realize your dream of being president.
To fully understand stupidity, daft rhetoric and what it’s like to appear a fool, Piyush, you need only to stand in front of a mirror.
$2.50 each or three for $6.00
Louisiana Voice 