May 9, 2020
To the Members of the House Ways & Means Committee,
My name is Jan Moller, and I’m the executive director of the Louisiana Budget Project, a nonprofit policy research and advocacy organization focused on lifting up low- and moderate-income families. I regret that I cannot be there in person to testify, but I have chosen to follow the stay-at-home guidance from our governor.
I write today in opposition to House Concurrent Resolutions 43 and 66, which suspend the corporate franchise tax. According to the Legislative Fiscal Office, it would reduce revenues by $378 million in the 2020-21 state fiscal year. That’s $378 million that won’t be available to educate our children, pay our police officers, or pay the doctors and hospitals that are caring for us during this pandemic.
For perspective: $378 million is more than what the state is spending this year on the entire LSU System ($361.6 million) and more than we will spend on TOPS next year ($319.4 million).
Unlike the federal government, Louisiana cannot spend more money than it brings in. Even without this resolution, that revenue will be severely diminished because of the economic downturn, making it harder to provide the basic necessities that our citizens need.
The Department of Revenue reports that two-thirds of the corporate franchise tax is paid by the wealthiest corporations – those with a taxable base of more than $100 million per year. Twenty-nine percent of the tax is paid by corporations with a tax base of $1 billion or more.
The equation here could not be more clear or simple: If you pass this resolution, you are giving a tax break to the most profitable corporations at the expense of students, families and workers who need your help.
The coronavirus pandemic has disrupted our ability to work, pay rent and send our kids to school. As many Louisianans struggle to stay afloat, our focus should be on those who are in the greatest need, and the greatest good. We will pull through this crisis by pulling together.
We ask that you use Louisiana’s limited resources to prioritize our hospitals, our low-income families, our students and the Main Street businesses that need your help – not to give a tax break to large corporations.