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A tax break, then mass layoffs

Posted on January 11, 2019

A month ago, Georgia-Pacific was granted a lucrative break on local property taxes for an expansion of its Port Hudson paper mill. On Thursday, the paper company announced that it was shedding 700 jobs at the plant as a result of declining demand for the office paper that is produced there. Sam Karlin and Timothy Boone of the Advocate have more:

Georgia-Pacific has benefited from several tax incentives over the years for its Louisiana facilities, with most going to the Port Hudson plant. As recently as December, the firm was promising to create 30 new jobs in exchange for a property tax break on its facilities. The Zachary School Board unanimously approved an Industrial Tax Exemption for the company on Dec. 18, about two months after the state Board of Commerce and Industry approved the tax break. The Metro Council deleted from the agenda the proposed tax break, effectively approving it, and East Baton Rouge Sheriff Sid Gautreaux also approved it. Gov. John Bel Edwards still would have to sign off for the exemption to go into effect. That tax break was for the $42 million expansion of the part of the plant that makes fine paper, bath tissue and paper towels, said LED spokesman Gary Perilloux. The exemption would be worth $772,000 in the first year alone.

 

Louisiana universities help the economy
Louisiana’s public colleges and universities impact student lives, but also the overall state economy. A new study conducted by Economic Modeling Specialist International for the University of Louisiana System examines the economic impact the system has on the state’s economy:

Altogether, the present value of the benefits associated with a UL System education will generate $361.2 million in savings to state taxpayers.  … Total taxpayer benefits amount to $2.0 billion, the present value sum of the added taxes and public sector savings. Taxpayer costs are $332.4 million, equal to the amount of state government funding the UL System received in FY 2017-18. These benefits and costs yield a benefit-cost ratio of 5.9. This means that for every dollar of public money invested in the UL System in FY 2017-18, taxpayers will receive a cumulative value of $5.90 over the course of the students’ working lives. The average annual internal rate of return for taxpayers is 12.9 percent, which compares favorably to other long-term investments in the public and private sectors.

 

Ending pay secrecy
Louisiana women are paid 70 cents for every dollar a man makes – one of the largest gender pay gaps in the county. To promote a more level playing field, the governor is proposing to ban “pay secrecy” by allowing employees to be able to discuss their pay without the fear of retaliation. Nola.com|Times Picayune’s Julia O’Donoghue reports:

The governor has also unsuccessfully backed requiring private businesses to pay women and men in the same jobs the same amount of money. Those proposals have received more attention than the pay secrecy proposals, though they are meant to work in tandem. Supporters say the proposals to end pay secrecy should be more palpable to the business community than traditional equal pay measures. It would allow the free market to work better, said Sen. J.P. Morrell, D-New Orleans, who is expected to sponsor the equal pay legislation this year. If employers can’t ban women and men from talking about their pay, then women will have a better chance of knowing whether they are being compensated fairly, Morrell said. If they aren’t, they can go work for another company, Morrell said.

 

“Netflix model” for prescription drugs
Louisiana has long struggled with high rates of Hepatitis C. The cost of prescription drugs have made treating this liver damaging disease difficult to treat. Gov. John Bel Edwards and the state Department of Health announced a new “Netflix model” that allows the state to pay a subscription fee and get unlimited amounts of the drug. This is an aggressive effort to lower the cost of prescriptions drugs. The Washington Post’s Carolyn Johnson has more:

The development of a new generation of cures for hepatitis C starting in 2013 offered a rare public health opportunity to eradicate a virus. But after the first medicine launched with an$84,000 price tag, the drugs became a flash point in the contentious debate over high drug prices. State governments and health insurers have had to make hard decisions about how to balance access to highly effective treatments against other spending priorities — in the midst of an opioid crisis that has helped fuel the spread of the disease among intravenous drug users. Edwards’s announcement came with a solicitation for drug companies to submit bids for the contract, in the hope of having one in place by July. The state’s goal is to treat 10,000 people with hepatitis C by 2020 — about a quarter of its infected population on Medicaid and in prison — instead of the slow trickle of about 1,000 people it treated last year at a cost of $35 million. That amount does not include undisclosed rebates.

 

Number of the Day
$10,000 – The amount of debt in Union Parish Town of Sterlington for each of its 2,000 residents. (Source: The Advocate )

 

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