Louisiana Economic Development (LED) would like to foster growth of corporate headquarters, logistics and distribution facilities, data centers and other business sectors that they label highly competitive.

The economic development center is estimating that the governor’s plan will create 10,000 direct jobs in the state over the next five to ten years.

 Jindal’s reforms include four bills, three of which will be handled by Sen. Neil Riser in the Senate. Riser, a Republican from Columbia, chairs the tax writing committee in the Senate.

I gave Riser a call this morning so he could explain the legislation he will help craft in greater detail.

He said that he doesn’t foresee any problem with getting the reforms that Jindal wants through the legislature and wanted to stress that performance-based incentives would be given only in cases that LED could clearly produce a net positive return on investment for taxpayers.

“As the nation and entire world goes into a recession and, somewhat of a depression, bringing jobs to the state becomes more competitive. Industry wants to know that they will be coming into a stable business environment, which includes workforce and tax-base,” Riser said. “In return, we want high paying jobs with good benefits –under this legislation that will be a given.”

Property Tax Exemption for non-manufacturing firms:

One of the bills that Riser is working on, that will be handled by Rep. Joel Robideaux in the House, is a property tax exemption for non-manufacturing firms.

Robideaux, a Republican from Lafayette,  is the chair of the House’s tax writing committee.

Louisiana currently offers an Industrial Tax Exemption Program incentive exclusively to manufacturers that are expanding or constructing new facilities in the state. Local property taxes are exempted for an initial five-year term, with a five-year renewal for a maximum of 10 years.

This legislation would extend the same exemption to companies targeted by LED for their capacity to generate new jobs, sales and tax revenue. Parishes would choose whether they participate by opting in or out, with the exemption ending in the parish two years after an opt-out vote.

It would take a constitutional amendment to make this a reality, which voters would decide on this fall.

Companies that would like to use the tax exemption must meet with approval from the Louisiana Board of Commerce & Industry. They would be required to demonstrate that more than 50 percent of their sales occur out of state. The state and company would enter into an initial five year contract, with an option to renew for another five years.

Payroll Incentive: 

Through the Quality Jobs program, Louisiana currently offers a rebate incentive of five percent to six percent of gross payroll for eligible expansion and relocation projects. A new incentive would offer up to a 15 percent rebate on payroll expenses, subject to a minimum Return on Investment (ROI). This bill is also being written for the legislature by Riser and Robideaux.

Companies identified by LED as having high-growth potential would be eligible—those that can demonstrate a positive return to the state through new jobs, new tax revenue and additional economic output for the state. Applications would be reviewed by LED and approved by the state Board of Commerce & Industry.

Based on its performance, the company would be eligible to receive the rebate for five years, with an option to renew for five additional years.

Corporate Headquarters Relocation Program

The final legislation in Jindal’s plan that Riser and Robideaux are working on is one that aims to relocate corporate headquarters to Louisiana.

The incentive would offer a 25 percent tax rebate over five years on qualifying relocation costs. The incentive targets Fortune 1000 corporate headquarters

At a minimum, projects would create 25 new direct corporate jobs paying twice the average private-sector wage in the parish, or $60,000 annually, whichever is lower.

Qualifying expenses for the rebate would include moving, equipment, leasing, construction and professional planning services related to the relocation. Expenses for moving personnel would be reimbursed on no more than 40 percent of the net new direct jobs.

“We are thinking about attracting business like oil companies out of Houston. They know how their property taxes are looking in other parts of the world  and we want them to look at Louisiana based on these incentives,” Riser said.

Corporate Tax Apportionment Program

The only legislation in Jindal’s economic agenda that Riser is not involved in is one to change the formula used to calculate corporate income tax— Robideaux is writing this one for the House and Sen. Mike Walsworth, R-West Monroe, will handle it in the Senate.

Many states, including Louisiana, rely upon a three-legged stool of sales, property and payroll factors to calculate corporate income tax.

In Louisiana, only manufacturers and merchandisers can qualify for single-sales factor apportionment, which bases corporate income and franchise taxes only on the proportion of sales that occur within the state.

For manufacturers with a majority of their sales out of state, the companies gain a tax advantage by operating in Louisiana.

The legislation would extend this benefit to other companies they determine are high-growth industries, posting more than 50 percent of their sales from out-of-state sources.

Like Riser, I don’t see Jindal having any trouble with his business agenda, with incentives being performance based and the economy in a slump. Of course, we will have to see what the legislation ends up looking like when it’s all done.

We have seen how incentives from the legislature have grown movie and television production.

Jindal will, of course, have a much harder time with his plans to reform education—now, that would make a great reality show. Somebody call Hollywood.

Each new pension system was created without a proper funding mechanism. When Louisiana’s pension debt reached an unbearable $5.8 billion in 1987, lawmakers finally decided to take action. They passed a constitutional amendment, ratified by the voters, which assured that these pension systems would pay off the $5.8 billion debt by June 30, 2029. The payoff date is now just 17 years away.

Meanwhile this $5.8 billion debt has mushroomed to around $18.5 billion, and it is a huge burden on our state general fund. But Louisiana is not unique: According to the 2010 Pew Center on the States report, all state and local government pensions in the U.S. face a combined liability of more than $3.35 trillion for retirement benefits promised to their public-sector employees. And while $2.35 trillion in assets is available to pay for those promises, a shortfall of $1 trillion remains for taxpayers to come up with sometime in the next 30 years. That’s about $8,800 for every U.S. household.

The Pew report also reveals that 21 states are funding their pension obligations below 80%. Unfortunately, Louisiana is one of those states. According to 2011 financial reports, Louisiana’s top four statewide retirement systems have an average funded ratio of only 56.7%. In other words, the state has only a little more than half of the money it needs to pay off this debt.

Where does this leave Louisiana? In a very tough situation. Lawmakers must take steps to stop the bleeding immediately. The Governor’s new plan to overhaul the current debt-laden system could move us in the right direction. For instance, he has proposed a portable hybrid ‘cash-balance’ pension plan for new state workers, giving them more flexibility and freedom in their careers. The proposed change would also result in a system that does not create a new unfunded accrued liability, and it would ensure that the state delivers a benefit no greater than it can get with market returns. Governor Jindal has also proposed increasing the retirement age for state workers to 67, consistent with the federal Social Security program. Those 55 or older and approaching retirement would not be impacted. Another cost-saving measure merges the Louisiana School Employees’ Retirement System (LSERS) into the Teachers’ Retirement System of Louisiana (TRSL) to streamline administrative and overhead costs. Today, LSERS has an excessively high administrative cost per member, which is well above the national average. Also, the ratio of LSERS and TRSL staff to plan participants is well above industry standards.

The steps Governor Jindal proposes to take are critical as Louisiana’s ballooning pension debt draws down more and more taxpayer dollars from the general fund. These small steps are essential to the sustainability of our state-backed pension funds. As it currently stands, Louisiana will make its final payment on the initial 1987 debt in June 2029. Estimates show that last payment will be somewhere between $1.3 and $1.9 billion. But then, in 2030, we begin to make payments on the unfunded debt for benefits that were paid to state employees after 1987. So, the cycle continues.

Did Louisiana’s state workers earn their retirements? You bet they did. Politicians have historically failed to fund the pension benefits they have promised. The question is will they acknowledge the reality of this ticking time bomb or continue to refuse to act responsibly for the benefit of the taxpayers and state workers? The time for addressing this ticking time bomb is now!

It’s from GBTV, and it’s Glenn Beck with Frank Gaffney of the Center for Security Policy, retired Lt. Gen. William G. Boykin and CBN News’ Erick Stakelbeck discussing developments in the Middle East and Iran in particular, and the implications of those developments on national security and the economy.

You might need a drink after you’ve gone through it. Naturally, since this is Beck it’s perhaps overdramatic. On the other hand, maybe not – Gaffney raises the subject that if you’re Iran and you want to follow through on your rhetoric about how a world without America isn’t just desirable but achievable, maybe the best way to get that done is an EMP attack on the U.S.

In case you’re not familiar with what that is, if you explode a nuclear device at high altitude over an area, the resulting electromagnetic pulse from that device has the potential to knock out all electrical circuitry within a line-of-sight reach of the explosion. Meaning a big enough device at a high enough altitude could take out an entire region of the country and bring it back to 1860. Cars made after 1975 or so won’t run, computerized banking is wiped out, power grids go down, electronic devices are rendered useless. Tens of millions of people die not from a nuclear blast, but from exposure and starvation.

And as they note on the panel, here is Iran testing missiles which blow up in midair, and they’re not acting like that constitutes failure. Gaffney mentions that you don’t even need an ICBM to pull off one of these EMP attacks; you could put a missile on a ship, sail it close to our shores and light it off straight up in the air to take out the entire Southeast, or East Coast, or West Coast. Or maybe the whole country. The panel believes within the next year Iran might well have nuclear weapons capability, so this scenario isn’t far-fetched at all. It’s pretty likely.

There’s also an interesting discussion on who will end up leading this Islamic caliphate the Arab Spring seems intent on rebuilding.

It’s anything but uplifting; in fact, it will scare the bejesus out of you. But if you want to recognize what we face and how unprepared we currently are for it, you should have a look at this clip.

“There is another economy — a second economy that is similar in respects to the East European or Third World socialist economies. It functions in a fashion opposite to the mainstream capitalist economy. It predominates in the pockets of poverty throughout urban and rural America. This economy has barriers to productive human and social activity and a virtual absence of economic incentives and rewards. It denies black, Hispanic and other minority men and women entry into the mainstream. This economy works almost as effectively as did hiring notices 50 years ago that read “No Blacks — or Hispanics or Irish or whatever — Need Apply.”

“The irony is that the second economy was born of desire to help the poor, alleviate suffering, and provide a basic social safety net. The results were a counterproductive economy. Instead of independence, the second economy led to dependence. In an effort to minimize economic pain, it maximized welfare bureaucracy and social costs.”

- Jack Kemp, 1990