When the second special session ended late Thursday night, the Louisiana Republican Party immediately sent out a press release declaring “victory”, and calling Democratic Governor John Bel Edwards “defeated”.
Of course, that’s not how he sees it.
“I don’t believe that we have failed,” the Governor said. “I would question some of their motives, rather than my leadership.”
So what happens next? Some have suggested the governor could use his line item veto to remove capital outlay projects scheduled for the districts of House members who fought revenue-raising measures. For example, House Speaker Taylor Barras has an airport hangar project in his district.
“I don’t threaten their capital outlay. That really isn’t my style,” Edwards stated.
But the governor is going after business and industry. Friday, he issued an executive order revamping the Industrial Tax Exemption process.
“That whole system is too cumbersome. It doesn’t make sense,” he explained. “And for decades it has been on auto-pilot.”
Manufacturing concerns seeking to build or expand apply to the state Board of Commerce and Industry for the exemption from paying local property taxes, among other benefits. Granted for 5 years initially, the exemption is usually automatically renewed for another 5.
“We’re not giving state money away; we’re giving local dollars away, which then puts an obligation on us to spend an awful lot of our revenue back with the locals,” Edwards said.
A study done by Together Louisiana, released last week, showed the program costs Louisiana nearly $1.7 billion in tax revenue per year.
What about the jobs involved? That same study showed the current public subsidy per job is more than a half-million dollars.
“What people need to understand is that it is not even tied to jobs,” Governor Edwards said.
The executive order now requires the exemption to be based on job creation or retention, and requires pre-approval from local political subdivisions: municipalities, parishes, school boards and sheriffs.
But don’t be surprised if Attorney General Jeff Landry – a Republican – decides to get involved.