About 15 years ago, Louisiana began a concerted effort to lure tech companies to the state with tax breaks and other perks in exchange for the promise of high-paying jobs. Economic development leaders dubbed it the “Blue Ocean” strategy. But data from Louisiana Economic Development show the tech companies that came routinely failed to meet job and payroll benchmarks. The Times Picayune | Nola.com’s Stephanie Riegel reports that some companies had to pay back some of the benefits, while others are still in dispute:
A review of LED’s Mega Fund and Rapid Response programs — two economic development programs that offer companies cash incentives in return for job creation — show that at least five other national tech firms failed to meet hiring and payroll benchmarks, forcing the state to try to “claw back” incentive payments already made and, in some cases, terminate the agreements altogether. It’s hard to say how much it has all cost taxpayers. State officials say the cost is negligible, because when companies don’t fulfill their pledges, the state insists on payback. But the fizzling of so many breathless announcements is a reminder that major economic development news is best taken with a healthy dose of skepticism.
Some tech supporters say the failures of job creation is a product of misplaced priorities.
If state and city leaders spent as much time creating a skilled workforce as they do creating incentive packages for out-of-state companies, Louisiana’s tech sector would be healthier, they say. “It is always sexy to go after a big employer who says they will employ 2,000 people,” said Courtney Williams, founder of the online learning platform Torsch. “But if we want companies to grow and stay here, we need to train workers and make changes to the education system now, from K-12 to higher ed and postgraduate.”
Wave of superintendent vacancies
Louisiana has been facing a shortage of teachers in classrooms, but it now appears that school districts are also facing an exodus of leadership. A wave of departures of superintendents has hit districts across the state, with an estimated 16 to 17 new school leaders slated for next year. The Advocate’s Charles Lussier reports on the reasons behind the vacancies at the top of state school districts.
[Louisiana Association of School Superintendents Executive Director Mike] Faulk, who himself spent about 25 years as a superintendent, first in Morehouse Parish and then in Central, said the stress of managing schools during the disruption of COVID is a big factor in all the superintendent departures. He pointed to other reasons, including the replacing of many school board members across the state with newcomers this past fall. “You had board elections and some of the boards made significant changes,” Faulk noted. After spending years building relations with board members, the less-enticing prospect of trying to do that again can lead school leaders to think twice about staying, Faulk said.
The coastal cliff
While Louisian faces a massive fiscal cliff in 2025, it also faces a huge coastal cliff seven years later. That’s because the state’s 50-year master plan to combat coastal erosion is almost exclusively financed by settlement dollars from the 2010 BP Deepwater Horizon oil spill. That funding source is scheduled to be depleted by 2032, and as The Times-Picayune’s Mark Schleifstein explains, state leaders are trying to figure out how to replace it.
The chairman of the state’s Coastal Protection and Restoration Authority, Chip Kline, recently spoke of the dangers that future problem poses to Louisiana’s ambitious 50-year, $50 billion master plan for the coast. “You are reverting back to the coastal program of the mid-2000s,” Kline said of the looming funding gap at a recent meeting of the authority’s board. “You’re going to go from a $1.7 billion annual plan that is implementing projects that have been envisioned for years, and if we don’t supplement that with additional revenues, the progress is going to halt.”
Some federal and state lawmakers are looking to offshore wind as a potential revenue source. A sweeping energy bill sponsored by Rep. Steve Scalise would increase Louisina’s percentage of offshore oil revenue and extend those royalty payments to offshore wind. A bill filed for the upcoming legislative session seeks to use offshore wind royalties for coastal restoration and flood prevention efforts.
Less clear is the potential funding the state might receive if Congress were to extend GOMESA revenue sharing to offshore wind energy production. A recent lease sale off the coast of New York resulted in a payment to the federal government of $4.37 billion. Rep. Joseph Orgeron, R-LaPlace, has pre-filed a bill for the upcoming legislative session that would amend the state Constitution to require money from offshore wind to go into the state’s coastal trust fund, where it could only be used for restoration or flood risk reduction projects.
Minimum wage increase would lock in historic gains
The number of employees earning less than $15 per hour has been nearly cut in half since 2020, as a historically strong labor market caused fewer workers to return to low-wage jobs. The Washington Post’s Heather Long explains how the past three years have created powerful lessons on how to help the working poor, and how raising the federal minimum wage could prevent losing crucial gains.
Policymakers would be wise to try to lock in the recent gains by lifting the federal minimum wage. It’s a widely popular idea, even in red states. Despite recent pay hikes for some, there are still almost 4 million workers who earn less than $10 an hour. A higher minimum wage would stop any backsliding on wage increases and benefit the very lowest paid in society too.
Number of the Day
1 million – Number of women the White House would like to hire in construction jobs over the next decade to aid in infrastructure projects. There are currently not enough trained tradespeople to fill the 200,000 construction jobs the Bipartisan Infrastructure Law and CHIPS and Science Act are estimated to create. (Source: U.S. Department of Commerce via States Newsroom)