Tax Exemption Reform Must Prevent Future Waste and Abuse

by David Gray

As the Louisiana Legislature prepares to debate tax exemptions during its upcoming session, the Louisiana Budget Project recommends several reforms that would prevent the tax exemption process from being abused in the future.

Tax exemptions reduce the amount of money the state has available to spend on higher education, health care, public safety and other vital services.  Louisiana lost more than $4.8 billion in 2011 from tax exemptions, a 167 percent increase since 2001.

Once a tax break gets on the books, it drains state revenue year after year without legislative review. Exemptions are also difficult to modify, allowing a minority of lawmakers to protect the exemptions that benefit their favored industries or other special interests – even if the exemptions are not supported by a majority of their colleagues.

Legislators can reform the process by regularly reviewing exemptions, mandating expiration dates for every exemption, limiting the amount of money that the state can spend on an exemption and lowering the bar to modify or repeal outdated, inefficient and unaffordable exemptions.

For a copy of the full report and more information on LBP, visit and read “Real Tax Exemption Reform Must Prevent Future Waste and Misuse.”

Welcome to Invest in Louisiana, formerly known as Louisiana Budget Project. We're excited to introduce our new name, brand, and website. Take a look around!