PAR head: Eliminating tax breaks tougher than it sounds

Published Jun 5, 2012 at 3:00 pm (Updated Jun 5, 2012)

A planned review of the state's tax rebates and incentives is "long overdue," says Robert Travis Scott, president of the Public Affairs Research Council of Louisiana. However, there are constituencies that support many of the incentives, he says, which makes repealing them difficult. For example, the state's costly movie industry subsidies are unlikely to go away, Scott says. He draws a distinction between tax reductions meant to encourage certain activities, on one hand, and outright subsidies such as those that benefit the film industry, on the other. "I'm all in favor of trying to help businesses with tax breaks, but subsidies are another matter," Scott says. He adds that in many cases, businesses don't even need to spell out on their tax forms which exemption they're taking, which makes it harder to evaluate whether exemptions are aiding economic development. Louisiana's lawmakers on Sunday approved conducting an in-depth review of tax breaks in state law to determine whether they should remain on the books or whether too much money is siphoned off with too little benefit to the state. Clerk of the House Butch Speer says many House members would like to see a cost-benefit analysis of the state's tax breaks, which could be a case of ideologically conservative Republicans encountering the state's fiscal realities this session. "We have an institutionalized budget crisis," Speer says. "The sky's always falling in May in Louisiana in the budget process, and will for the foreseeable future." Scott and Speer were among the speakers at a League of Women Voters luncheon today. —David Jacobs