Tax incentives have played a big role in Louisiana budgets in recent years. But it's also a conservative state bent on limiting government power. The latter is likely behind the defeat of a ballot amendment that would have given the legislature more flexibility in dealing with rebates.
Louisiana is one of seven states that holds so-called “limited scope” legislative sessions every other year that focus only on fiscal matters and reserve other policy issues for general legislative sessions. The state's constitution limits fiscal sessions to 45 days (instead of the usual 60) and restricts topics to the budget, revenues and appropriations. But for fiscal sessions, the legislature can't address the tax incentives and rebates that governments use to lure in new businesses or get existing ones to stay. Legislators can only address those topics every other year, even though the government offers them every year.
A measure on the Oct. 24 ballot would have broadened the definition of Louisiana’s limited scope sessions to include rebates and was widely supported by transparency advocates. But the amendment failed as 54 percent of voters nixed the idea.
Its failure leaves lawmakers little flexibility when facing tough budget choices. The state struggled earlier this year -- in a fiscal-only session -- to fix a $1.6 billion deficit and may have a $400 million shortfall this year. That shortfall would grow to $1 billion in 2017.
The crisis has come as oil revenues have stalled and income tax cuts that lawmakers approved a few years ago are slowing those revenues even more.
Louisiana has a long history of big corporate giveaways, according to Good Jobs First, a nonprofit that tracks corporate tax subsidies. The group estimates the state is awarding nearly $1 billion a year in industrial property tax exemptions for existing facilities. Earlier this year, The Fox station affiliate in New Orleans investigated some of the million-dollar giveaways the state had made and found “shocking gaps in oversight” in the lucrative programs.
