Louisiana Weekly

THE LOUISIANA WEEKLY -

YOUR MULTICULTURAL MEDIUM

Page 2

May 18 - May 24, 2015

Louisiana may see sales tax hike

we have ever given in tax credits in

any one-year is $251 million, since

the program has been around for

the last dozen years. Last year, we

did $226 million. So, Chairman

Robideaux put forth his bill capped

at that, saying, ‘This is what we

did last year. Let’s keep it there.’”

“The problem with a cap is that,

now that there are three major

operating studios, major film stu-

dios in Louisiana, one in Shreve-

port, one in Baton Rouge, one in

Chalmette, and there are more slat-

ed to be built. Now that we have

this infrastructure, we are starting

to attract these type of permanent

roots, not just the ‘film and fly

crowd.’ We are starting to attract

the larger budget films, like

Transformers,

which could be a

$200 million movie. They could

suck up all of the credits by them-

selves, or at least a third or half of

them in one year.”

Or go somewhere else, since one

of the proposals is to cap each

movie at $30 million. “The State

of Georgia,” Trascher cautioned,

“years and years ago, had these

really generous tax credits. They

brought in a ton of movie business.

[Then], the Georgia economy

started experiencing trouble. They

scrapped the program altogether.

Louisiana pretty much adopted

what Georgia had done. We started

getting business. Georgia could-

n’t believe that the film industry

left; that they just walked out of

town. So, they re-introduced the

credits. They just mirrored what

Louisiana did, and now, they’re

started getting some of it back.”

“New Mexico has it. Vancouver,

up in Canada, has tax credits.

Look, these [movie] guys will go

where the deals are. However,

that’s the ‘film and fly’ crowd.

That’s the folks that will come in,

produce the movie, take their cred-

its, and go back to Hollywood.

What we’re seeing now is 13,000

jobs get created, direct jobs not

contract labor like restaurants and

catering…and now we have three

studios like the Ranch studio in

Chalmette.”

“Assuming that the credits come

out of this session in pretty good

shape,” The Ranch Studio alone,

Trascher observed, “is poised to

spend close to $50 million on a

state-of-the-art [facility] which

will be the largest film studio in

the country. And, on top of that,

they are building it right in the

middle of one of the hardest hit

parishes from Hurricane Katrina.

And, in that project, they are reha-

bilitating three closed box stores,

an old Save a Center, a Home

Depot, and an old Lowes.

“So, they are putting all of these

buildings back into commerce.

The movie that is coming up that is

filming about the BP Oil Spill,

they are going to be hiring hun-

dreds of out-of-work oil rig work-

ers, who were laid off thanks to

falling oil prices and things related

to the BP Spill. They will hiring

them as extras and set hands, and

things like that. They will be put-

ting these guys to work.

“So, again, it’s really short-

sighted. When you say, ‘We’re

going to mess with an industry.

We’re going to just put out a signal

that maybe we’re not appreciative

of this business to where it’s going

to scare off some of these projects

to go somewhere else.’ We’re

going to lose 13,000 jobs

overnight. We’re still going to

have to honor these hundreds of

millions of dollars in tax credits

that are already in the pipeline,

already certified, And taxpayers

will get nothing for it in return,

because we’ve killed the industry.”

Other proposals, such as the

effort to substantially roll back or

eliminate the Inventory Tax Credit

will not only have a chilling effect

on business creation, it will cause

many parishes “to roll forward

their millages by 200 percent or

more” to make up the lost revenue,

and the fiscal impact on the 2015

budget will be far less $615 mil-

lion than the House hopes to find

to plug half of the deficit.

The good news, Trascher added,

is that “we’re at halftime in the

legislature.” The capping of film

credits and other rollbacks are far

from a done deal. That’s why

many observers believe that

Alario’s plan to consider some rad-

ical proposals, such as reinstituting

one cent of the state sales tax on

business utility bills or Rep. Jay

Morris’, R-Monroe, House Bill

768 to raise $231 million next year

by reinstituting one cent of the

sales tax on a broad range of activ-

ities now exempt from that tax,

may find a receptive audience.

In point of fact, a couple of pen-

nies in sales tax across the board

could allow for a phaseout of the

corporate income as well as fran-

chise tax, propelling Louisiana into

the ranks of one of the most compet-

itive states of business attraction.

The short-term $1.4 billion pro-

duced would plug most of the budg-

et in year one, as the other taxes are

phased out over the decade.

Even if Jindal vetoes a net tax

increase in this year’s budget,

though, the legislature might

demand a constitutional preroga-

tive not exercised in decades,

calling a “veto session” to over-

ride the governor. Should John

Alario’s final deal not meet

Jindal’s tight “Americans for Tax

Reform” standards on no new

net taxes, the Senate President

will have the votes to override

any gubernatorial veto, Trascher

predicted.◊

By Christopher Tidmore

Contributing Writer

To plug Louisiana’s $1.6 billion

deficit, the budget fixes proposed

in this year’s legislative session

can best be called “confused.”

Seemingly contradictory bills are

coming to the floor to limit popu-

lar rebates, like the film and inven-

tory tax credits in ways that are

often at odds with one another.

However, a proposal by State

Senate President John Alario to

substantially raise sales taxes in

exchange for cutting the Corporate

Franchise Tax is quietly being

whispered as a potential solution.

And, more radical tax swaps may

be on the way.

House Ways and Means

Committee

Chairman

Joel

Robideaux (R-Lafayette) might

argue, as he did last week, that his

committee is has no plans to con-

sider any more major revenue-

raisers beyond the most recent 11

taxes that the House approved.

Yet, Gulf South Strategies lobbyist

and legislative insider Brian

Trascher warned

The Louisiana

Weekly

to never underestimate the

influence of the Senate President.

“He runs a very tight ship over

there in the Senate. He was in the

House for a very long time. He

served in the leadership. He was

the only the second man to ever be

both as Speaker of the House and

Senate President. The guy knows

what he’s doing. He’s also a CPA

by trade, so he knows number.

I’m comfortable that he and

[House Speaker] Chuck Kleckley

will figure something out.”

The labyrinthine rules specified

by Grover Norquist’s Americans

for Tax Reform that are guiding

Jindal allow the Legislature to

phase out a tax over a decade but

enact a so-called “revenue offset”

in fiscal 2015-2016 that would

permit an equivalent amount of

substitute taxes to be increased

without risking a net tax hike.

That would allow the House and

Senate to hike $140 million in

sales taxes this year, which is

equivalent to the revenue the state

is expected to collect from the

franchise tax in 2015. And, then

phase out the other business tax

over the next decade. Jindal’s

Revenue Secretary Tim Barfield

seemingly endorsed the idea when

he noted that eliminating the

Corporate Franchise Tax would

improve Louisiana’s tax ranking

among the 50 states and simplify

the state’s tax code.

The legislature has to do some-

thing creative. The first draft of

the budget, to be considered on

the floor on May 21, 2015, relies

on $615 million in new revenues.

The monies come from 20 percent

across the board cuts to the state

incentive tax credits, cuts hitting

everything from Inventory to

Theatrical/Musical tax credits, to

the complete elimination of the

credit on Hydraulic Fracking

when gas prices hit $70 to several

proposals for absolute caps on

Movie Tax Credit below what the

$226 million that the state

expended this year.

More worrying, as Trascher

noted, “The proposals to cap the

film tax credits and most of the

other fixes will not produce one

dollar in revenue this year...You

could cut the entire film tax credit

program today, to nothing. You

could absolutely do away with it,

and it would not change anything

with regards to the Louisiana fis-

cal budget for the next two years.

Because these credits are already

out there. The state does not real-

ly know—they are estimating—

how many certified credits are

out there in the pipeline. And,

$100 million in certified credits

are already out there.”

“So, to talk about cutting a pro-

gram that is one of the few tax cred-

its out there that has already pro-

duced an ROI [Return on

Investment] for the taxpayer is

nothing but theatre, if you forgive

the pun.” Critically, the legislators

are not factoring the taxes that

movies produce from personal

income taxes to sales taxes for

parishes, that could make the fiscal

problem worse over the next year.

And, capping the film tax cred-

its to below the $226 million spent

this year, to $200 million or lower

could send a chilling signal to the

movie industry, Trascher warned.

“That’s the problem with sending

these signals out there. The most

Obama: Stereotypes on a hurdle to ending poverty

16.9 million moreAmericans insured

under Obamacare, study says

have to change how our body

politic thinks, which means

we’re going to have to change

how the media reports on these

issues,” Obama said. “… It’s a

hard process because that

requires a much broader conver-

sation than typically we have on

the nightly news.”

Obama appeared with

Professor Robert Putnam of

Harvard’s Kennedy School of

Government, and Arthur Brooks,

president of the American

Enterprise Institute, at a Catholic-

Evangelical summit.

Obama said he was hopeful

that the recent unrest in places

such as Baltimore and Ferguson,

Missouri, had underscored the

need to address income inequal-

ity. But when it came to dis-

cussing policy specifics, divi-

sions were clear.

Obama highlighted a loophole

that allows hedge fund managers

to pay low tax rates, saying, “If

we can’t bridge that gap, then I

suspect we’re not going to make

as much progress as we need to.”

Brooks countered that the loop-

hole was a “show issue,” and that it

was more important to tackle the

high cost of middle-class entitle-

ments. Brooks warned against

impugning the motives of

Republican leaders, calling it the

“No. 1 barrier to making

progress.”◊

By Nancy Benac

AP Writer

WASHINGTON (AP) — It

wasn’t your typical panel discus-

sion: President Barack Obama sat

down Tuesday with leading

thinkers from the left and right to

reflect on poverty, income inequal-

ity and the stereotypes that get in

the way of finding solutions.

“The truth is more complicated”

than the caricatures of liberals just

wanting to throw more money at

undeserving “sponges,” Obama

said, and descriptions of “cold

hearted” free-market types who

see the poor as “moochers.”

Obama told an audience of about

700 at Georgetown University that

it makes him mad when he hears a

“constant menu” of stories on Fox

News Channel featuring poor peo-

ple who want a “free Obama

phone” or other easy benefits.

“They will find folks who make

me mad,” Obama declared. “Very

rarely do you hear an interview of

a waitress, which is much more

typical, who is raising a couple of

kids and is doing everything right

but still can’t pay the bills.”

Obama said the stereotypes are a

barrier to finding solutions that

will be acceptable to Republican

leaders in the House and Senate.

“If we’re going to change how

John Boehner and Mitch

McConnell think, we’re going to

Although people may have obtained

coverage independently of the

Affordable Care Act, such as by

securing jobs with health benefits,

the expansion of Medicaid and sub-

sidized marketplaces was a signifi-

cant factor in the increase, according

to Bloomberg.

Data from a Gallup poll reflects

a similar estimate to the study,

posting that 16.4 million people

gaining coverage under the

Affordable Care Act. The Gallup

Corporation and the Department of

Health and Human Services esti-

mate that about 13 percent of

American adults still do not have

health insurance coverage.◊

By Agnes Constante

Contributing Writer

(Special from Asian Journal

and New America Media)

–

Nearly 17 million Americans have

gained health insurance since key

provisions of the Affordable Care

Act were implemented in 2013,

according to a study by non-profit

research organization RAND

Corp. The report, released

Wednesday, May 6, in the journal

Health Affairs,

found that from

September 2013 to February 2013,

22.8 million individuals signed up

for coverage, while 5.9 million

lost coverage, resulting in a net

gain of 16.9 million. The study

examined a sample of about 1,600

people who were surveyed in 2013

and 2015.

Because of the small number,

findings should be considered

rough estimates rather than precise

measurements, according to

Bloomberg. However, because

researchers queried the same people

twice, they were able to obtain a

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