Legislative study panel begins tax break review
Last Modified: Monday, July 23, 2012 5:17 PM
BATON ROUGE (AP) — Among the billions of dollars in tax breaks on Louisiana's books, many have little oversight and some even give checks to people and businesses that owe no taxes in the state, lawmakers were told Monday.
A 14-member Revenue Study Commission, packed with legislative leaders, opened its review of the Louisiana's tax breaks with a crash course on how many tax breaks exist, which ones are tracked for performance and how they affect state income estimates.
Lawmakers set up the panel in the most recent legislative session to determine whether the exemptions, credits and rebates are worth keeping as Louisiana faces repeated rounds of spending cuts and continuing budget woes that threaten public colleges and health services.
The legislators were told that few of the tax breaks that drain substantial amounts from Louisiana's coffers have organized review processes.
For example, the Louisiana Department of Economic Development oversees only 11 percent of the $1.8 billion in corporate income and franchise tax exemptions, LED Assistant Secretary Jason El Koubi told lawmakers. Of the $364 million in LED-managed tax breaks, nearly half are tied to the state's film incentive program.
Greg Albrecht, chief economist for the Legislative Fiscal Office, described the state's revenue forecasting process.
He explained that some of the tax rebate programs give money to people or businesses even if they don't have a tax liability, so the state revenue department is writing rebate checks, rather than just decreasing the taxes paid.
"A lot of time what we're doing is not cutting taxes. We're spending revenue, but doing it in a roundabout way," Albrecht said.
The study commission will recommend reducing or eliminating tax breaks deemed to be low-performing or antiquated.
Newly-elected chairman, Rep. Joel Robideaux, R-Lafayette, said he's going to talk to legislative staff to "figure out an agenda and what's the best way possible to attack this."
Suggestions are due to be compiled by Feb. 1, with any legislation stemming from the review to be considered in the regular session that begins two months later.
Robideaux said he expects to begin combing through the details of individual tax breaks at the next meeting in early August.
Backers of the legislative review say some of the tax breaks are no longer achieving the public policy for which they were intended and could be eliminated, freeing up money that could pay for higher education and health services.
Businesses are the largest beneficiaries from the tax breaks. More than 88 percent of the corporate income taxes that could have been collected in 2012 weren't, because of tax exemptions and credits, according to the revenue department.
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