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Lt. Gov. Billy Nungesser is sounding the alarm about the Landry Administration’s special session proposal to alter a key funding stream his department relies on for tourism promotion.
In an interview with LaPolitics, Nungesser says he’s also concerned about the potential loss of Louisiana’s subsidies for film promotion and historic structures restoration, both of which he considers important tourism drivers.
As an alternative, Nungesser is circulating his own tax idea, based on a former governor’s proposal from more than 40 years ago.
The Louisiana Office of Tourism receives most of its funding from the Louisiana Tourism Promotion District, a special taxing district that covers the entire state. State law authorizes the district to levy and collect a sales and use tax of up to 0.03%, and the state Department of Culture, Recreation and Tourism gets an average of about $30 million per year from that fund.
The taxing district would go away under the administration’s proposal, but CRT would still get the money, Revenue Secretary Richard Nelson told LaPolitics last month. (LaPolitics was unable to speak with Nelson on Monday.)
“We’ll just dedicate a portion of the tax to that cause,” Nelson said. “So substantively, it doesn’t change anything.”
But Nungesser says being forced to ask the Legislature for funding every year could be a dicey proposition.
“I don’t feel really good about having to go up against health care, education, fixing our roads, all the other valuable things in the budget, unless it’s set in stone that the funds are going to tourism,” Nungesser says.
Relying on an annual appropriation doesn’t lend itself to the multiyear planning that the job requires, Nungesser argues.
“We have to plan out four or five years on these projects we do all over the world,” he says. “I haven’t seen the details of how they’re going to commit that it will be there. And I think that the easiest and best way is to leave it like it is.”
Nungesser is likewise uneasy about the proposals to sunset programs for the state’s film incentives and restoration of historic buildings. Combined, the two programs cost about $220 million or so per year―money the administration wants to use to offset the revenue lost from slashing income tax rates.
But Nungesser argues the film sector offers more benefits than many people realize, including boosting tourism. He points to a recent study that indicates up to 6.2% of visitors to Louisiana were motivated to visit by films or TV shows, resulting in up to $1.16 billion in additional revenue for the state.
“I hate to see us get rid of it when all these people invested billions in building these incredible studios,” he says, adding that there could be ways to tweak the program to add value for the state.
As for the historical tax credits, he says they have helped revitalize core areas in many towns across the state. Along with tourism, CRT also oversees the Louisiana Main Street program.
Without the restoration tax credits, many projects that are in the works now likely will not go forward, Nungesser says.
“You’re talking about empty buildings in a lot of these communities,” he says.
So what should the state do? Nungesser has an idea.
In 1982, then-Gov. Dave Treen proposed the Coastal Wetlands Environmental Levy, or CWEL Tax. The goal: generate money to restore Louisiana’s deteriorating coastline, while addressing a budget crunch that Treen saw coming.
Lawmakers once again are planning for a fiscal cliff, and the need for coastal restoration might be more urgent now than it was during Treen’s administration. Has the time for Treen’s failed tax proposal finally come?
Nungesser is proposing a 5 cent tax per cubic foot of natural gas, a 50 cent fee per barrel of oil, and a 1 cent per gallon levy on pipeline-refined gasoline.
The billions the fees would raise could provide a financial base for the state, funding everything from coastal restoration to raises for teachers and police officers, Nungesser says. Rather than fighting for Industrial Tax Exemption Program exemption to save 80% of their property taxes for 10 years, companies could be exempt indefinitely, so there would be something in it for industry.
And while Louisiana residents would not be exempt from the price increases the new fee might spur, they could be given an annual rebate check, not unlike Alaska residents get from mineral revenue.
