Are corporate subsidies worth the cost?

Are corporate subsidies worth the cost?

Louisiana spends a lot of money on economic development through corporate subsidies. Money that could otherwise go to public schools, police and job-training programs is instead used to lure big businesses to the state. Supporters of these corporate tax breaks argue that Louisiana is better off giving $2 billion of Calcasieu Parish’s tax dollars to a single company over the next 10 years, for example, than it would be pouring those dollars into local schools and services. But, J.R. Ball, writing in the Greater Baton Rouge Business Report, argues that Louisiana may not benefit from these giveaways as much as our lawmakers like to claim. Ball cites a report from North Carolina State University, which analyzed financial incentives offered by 32 states from 1990 to 2015. The report found that many of the credits, abatements and tax exemptions states offered corporations hurt the states’ overall fiscal health:

Usually when economic development wonks get to hurling corporate welfare like doubloons at Endymion, the argument from naysayers like Together Baton Rouge is whether the tax incentives lead to actual job creation and other economic benefits. Yet, given the state of Louisiana’s fiscal affairs one might think a free-spending politician or two might wonder about the impact all these giveaways have on the budget’s bottom line. … In other words, the amount of potential tax revenue exempted to secure a new economic development project or expansion wasn’t always offset by other taxes resulting from the ripple effect of the deal.

 

Why paid leave is important
America is the only industrialized country in the world without a national paid leave policy for new parents. This oversight can affect any family, but not being able to take time off work can be especially traumatic for those who experience troubled pregnancies, or whose newborns require care in the Neonatal Intensive Care Unit. That’s what happened to Leigh Townsend of Prairieville, who is a March of Dimes advocate and who shared her story in a letter to The Advocate:

Following the premature birth of my second child at 34 weeks, the six weeks of paid leave I accrued from my employer was wholly inadequate. Most premature babies require specialized care once they go home, and our son was no different. In order to care for him, I went without pay for an entire month. As a March of Dimes advocate working with critically ill babies in the NICU, I often see mothers heading back to work six or seven days post-partum so that they can use their paid leave when their babies come home. These families are forced to make the agonizing decision to leave their sick, fragile child in order to maintain stability and financial independence.

Louisiana lawmakers had a chance to address the issue this session by passing Senate Bill 186 by Sen. J.P. Morrell. But the bill was pulled from consideration in the Senate Finance Committee amid opposition from business interests.

 

Prioritizing primary care
People in rural and underserved areas in Louisiana often can’t access affordable care in a clinical setting, such as a doctor’s office. As a result, many patients end up making expensive visits to emergency rooms and hospitals for health issues that could be treated just as effectively with a lower-cost doctor visit. House Bill 105 includes funding that would make it easier for Medicaid recipients to use preventative and primary care programs, a change that should limit the medical costs that grow exponentially when chronic health issues go untreated. Targeting these problems early reduces costs for everyone, while helping patients remain healthy and employed. Dr. Richard Bridges of the Louisiana Association of Family Physicians opines in The Advocate:

By increasing funding for the treatment of these patients, we can make significant changes to their lives. This funding will allow more patients to be seen and hopefully started on treatments earlier to prevent the exponentially more expensive cost of treatment later for many of the chronic conditions. These kinds of commitments from the state and Medicaid are extremely important.

House Bill 105 – the state operating budget – is nearing final passage in the Legislature, with the full Senate expected to take up the bill late this week.

 

Helping adults complete college
There are 653,000 adults living in Louisiana who have some college credit but no degree. Most are working, but many, saddled with debt but lacking a credential that would qualify them for better jobs, face a future of low-wage work and a lifelong struggle against poverty. In response, the University of Louisiana System has created CompeteLA, aimed at helping adults re-enroll in a college program and eliminating barriers to attaining a college degree. The program is modeled on successful initiatives in Florida and Mississippi. Leigh Guidry with the Lafayette Daily Advertiser reports on Compete Louisiana’s approach to lowering the barriers that keep adults from re-enrolling:

Barriers come in all sizes. Sometimes it’s institutional debt that prevents a student from getting a transcript. “It just takes one ounce of frustration that says, ‘I’m not going to do it,'” UL System President and CEO Jim Henderson said. CompeteLA coaches help with that. They help students to apply and find programs that are right for them, helping them decide among online, hybrid (some online and some in-class) or eight-week courses. Coaches do the leg work like making phone calls to get transcripts or find local options for childcare, Henderson said. Once they’re in classes, coaches encourage students with messages, line up tutoring and hold them accountable with task lists on a mobile app.

 

Number of the Day
$1,841– Amount that a homeowner in Cameron Parish would save in property taxes each year if all tax exempt (ITEP) properties were returned to the local tax rolls. (Source: Together Louisiana)