Tax incentives are (still) costly

Tax incentives are (still) costly

Louisiana’s panoply of tax rebate and incentive programs cost the state $1.1 billion in tax revenue that otherwise would have been collected from corporations and individuals, according to a state audit released Monday.

Number of the Day

78 - The number of tax rebates and incentives that contributed to Louisiana’s $1.1 billion tax revenue loss. (Source: The Advocate)

Louisiana’s panoply of tax rebate and incentive programs cost the state $1.1 billion in tax revenue that otherwise would have been collected from corporations and individuals, according to a state audit released Monday. While some of these tax incentives produce a positive return-on-investment for taxpayers, others are clear money-losers. And some of them can’t be quantified. Elizabeth Crisp of The Advocate has more:  

One of the largest in the budget cycle covered was about $205 million in revenue lost to the Motion Picture Investor Tax Credit. That program, which subsidizes movie-makers who film in Louisiana, is estimated as having a return of 22 cents for every dollar spent. Officials have recently touted changes made to the film tax credit program in 2016 as offering more stability that has stimulated the film industry here, after a brief decline. Gov. John Bel Edwards’ administration plans to release an “economic impact” report in the spring. Other breaks also are given for some child care expenses, rehabilitation of historic structures and solar panel installation, among others.

Not every tax incentive is intended to generate a positive revenue return to taxpayers. Revenue Secretary Kimberly Robinson is working to ensure any incentive whose intent is to stimulate the economy can be quantified.

Robinson said in response to the audit that the state Revenue Department plans to develop and dedicate resources to a team of economists to better keep up with how productive incentive programs are. “The economists, working in conjunction with our analysts, will develop consistent procedures and defined calculations for use in (return on investment) analysis for those incentives that are legislatively intended to provide a return of revenue to Louisiana,” she wrote.

 

Community college students deserve better outcomes
Community colleges are supposed to be an accessible and affordable entryway into higher education. Yet students often encounter barriers that keep them from completing a degree or certificate program. This, in turn, has a significant impact on local economies, which rely on community colleges to provide easier access to high-need jobs. Improving completion rates is crucial, and a new report by Elizabeth Mann Levesque from the Brown Center on Education Policy has some policy recommendations:

The structural problems discussed in the full report–such as unclear pathways from enrollment to graduation, enormous student-to-adviser ratios that make it challenging to provide one-on-one support, and a lack of easily navigable support services–are fundamental barriers to college completion. Addressing these issues should be a core component of colleges’ strategies to increase completion rates.

Increasing access to support services is a common theme in the report, which also recommends increased use of technology to help low-income students stay connected to their prospective community colleges to combat “summer melt” which refers to students who are accepted only to have college fall off their radar over the summer.

 

ZIP code and race are barriers to opportunity in New Orleans
Where you live is directly connected to your quality of education, access to food and transportation options. Data can even predict how ZIP code impacts a child’s life outcomes, from median income, to college attainment, to likelihood of incarceration. These statistics are no coincidence, as decades of racist housing policies have ensured that non-white residents do not share in the economic growth and benefits that come with owning a home. Stacy Seicschnaydre of Tulane Law School, writing in Nola.com|The Times-Picayune describes how New Orleans can undo these historically racist housing policies that continue to affect communities and neighborhoods:

First, we must view affordable housing policy as crucial to determining whether we continue to reinforce segregationist tendencies or crack open the door of opportunity to low-income New Orleans kids. The time has come for inclusionary zoning, which leverages private investment for affordable housing development by granting developers incentives in exchange for setting aside a certain number of units in up-and-coming areas as affordable to working families. Second, we must recognize the imperative to use government programs to create brighter futures. This means supporting policies necessary to assist voucher families in gaining access to residential spaces that are healthy, safe and brimming with opportunity. It also means supporting federal and local government agencies when they seek to fulfill their obligations to further fair housing, rather than lobbying them to maintain the status quo of separate and unequal.

 

Angola healthcare is inhumane
In the latest documenting of inhumane conditions in Louisiana prisons, a lawsuit will be heading to trial today alleging conditions that equate to cruel and unusual punishment for inmates in Angola Penitentiary. Joe Gyan of The Advocate writes:

A lawsuit claiming “grossly deficient” medical care at the Angola maximum-security prison heads to trial Tuesday. Lawyers for the inmates say their clients suffer cruel and unusual punishment. Countless inmates already have suffered unnecessary pain and suffering, exacerbation of existing conditions, permanent disability, disfigurement and even death, the lawsuit alleges. … The suit claims Angola’s medical care grew worse when Earl K. Long Medical Center in Baton Rouge, which used to serve prisoners with medical emergencies, was closed during the reorganization of the state’s charity hospital system. “Prisoners report horror story after horror story: a man denied medical attention four times during a stroke, leaving him blind and paralyzed; a man denied access to a specialist for four years while his throat cancer advanced; a blind man denied even a cane for 16 years,” the suit states.

 

Number of the Day
78 – The number of tax rebates and incentives that contributed to Louisiana’s $1.1 billion tax revenue loss. (Source: The Advocate)