I’ve never been a huge fan of the “economic development” trend of the past decade in which governments hire highly-paid sales professionals to entice free agent corporations to site factories and headquarters in their jurisdictions.
Usually, those transactions involve sweetheart deals on taxes and very often the favorable treatment given to the journeyman companies comes at the expense of their local competitors. There may be an uptick in the number of available jobs in the area where the new company sets up shop, but as an investment in growing the tax base these arrangements don’t usually fully pan out. As often as not, if not more often than not, the job creation the free agents promise rarely pans out and by the time the state or the local government begins asking questions the free agent is off to yet another greener pasture.
It’s better to just create the most favorable tax and business climate possible, orient the structure of your government toward creating the largest, most motivated and most qualified workforce you can and let your own homegrown businesses develop into Fortune 500 concerns who wouldn’t consider becoming free agents because there’s no place better than home for favorable tax treatment.
But that’s never really been Louisiana, of course, and so to compensate for what our government structure, the quality of services our public sector generates and our tax code do to inhibit our economic development we’ve had to engage in the “big-game hunting” circus and create a government agency whose job it is to recruit companies from elsewhere to drop anchor in Louisiana with tax breaks and other goodies.
And Stephen Moret, the head of Louisiana Economic Development, has been one of the nation’s best at big-game hunting. Moret, perhaps more than any one person, is responsible for the tens of billions of dollars in capital investment on the way in Louisiana’s industrial sector due to a lot of tireless work over the past several years.
Stephen Moret, who has served as Louisiana Economic Development secretary since 2008, will leave LED to become the LSU Foundation’s president and CEO in May, the private LSU group’s board of directors announced Monday.
The job is a good fit for Moret, who was in the LSU band and also did a stint as Student Government Association President while he was a student at the Ole War Skule and also served as an assistant to then-Chancellor Bill Jenkins before getting into the economic development game. He’s as big an LSU supporter as there is, he’s demonstrated the ability to use a flagship university like LSU as a tool for economic development during his time both at the Baton Rouge Area Chamber and at LED and he also has a tremendous network of people with lots of money he can tap into as he takes over the LSU Foundation – which very badly needs to grow the school’s endowment and private fundraising base.
So while you’re going to hear a great deal of bitching today about how Moret, who worked for Bobby Jindal, is getting a job at a school “he helped to destroy” (and you have our permission to slap silly anyone making that idiotic statement, though it’ll keep you busy), rest assured getting him is a coup for LSU.
More interesting, though, is the timing of the move.
You probably won’t hear this, but Moret is getting out of LED at exactly the right time. With the state’ budget in a $1.6 billion hole and with Louisiana’s system of tax credits for economic development purposes a likely casualty of the effort in to balance that budget in this year’s legislative session, the heyday of doling out freebies to prospective large employers in the state is largely over. The money just isn’t there for big-game hunting any longer.
And while it’s quite likely that within the next couple of years comprehensive tax reform is coming to Louisiana – for example, David Vitter has said a special session to revamp taxes and the budget would be his first order of business were he elected, and Scott Angelle’s camp is talking about a comprehensive review of state tax credits on a permanent, revolving basis (as in, every tax credit gets put under the microscope every 4-5 years by a panel of economists). Should that reform go through, it’s likely it will result in a simpler, more competitive tax code built for better organic economic development. A guy like Moret is therefore no longer needed.
Either way, going out and working deals so the politicians can do ribbon-cuttings probably won’t be the brisk business it has been over the last few years. The state’s economy will likely hum along at a faster pace thanks in part to Moret’s past efforts, and one might imagine Louisiana will grow faster in future years than it has grown during the time Moret and Jindal have held their respective positions, but it will grow with a lot less fanfare and news about this multinational corporation siting that facility in this or that Louisiana town.
The guess is that Moret saw that writing on the wall and decided it was time to return to LSU’s campus and his passion for the school. Which is a great move for him, something LSU needs and a sign of the times at LED.