A message to the Louisiana employers out there: Thank you for what you do to make this state great.
Much has been discussed over the last two months about the legislative session and its crusade to raise taxes. We at LABI, along with countless others in the business community, have aggressively explained the consequences to Louisiana’s economy that can result should this be done in a cavalier way.
The Legislature has not shown much interest in pursuing more prudent approaches such as reforming the state’s pension system to generate savings for education; giving higher education the financial autonomy they have long sought; or unlocking the roughly $1.3 billion in non-constitutional, non-fiduciary budget funds so these dollars could be used each year for priorities such as higher education and health care.
Efforts at structural budget reform have simply not gotten much traction. Instead, the focus has been largely on generating new revenue through taxes and fees.
While the singularly focused nature of relying on new taxes to fuel this budgeting effort continues to be a concern, the rhetoric used by some to accomplish it has been even more telling.
Many elected officials who will soon be asking for your vote have thrown around phrases such as “corporate welfare” and “big business.” Many of these legislators are the same folks who have gone to exhaustive efforts over the years to take credit for cutting ribbons and creating jobs in your district.
The rhetoric being used by many to justify the tax actions by the Legislature is not accurate, nor is it fair to the thousands of businesses in this state that employ, invest and create opportunities in our communities each and every day.
For instance, the inventory tax credit that has been in place since 1991 is suddenly being criticized by some as corporate welfare, though nothing could be further from the truth. By cutting this credit, how easy will it now be for your town’s local hardware store that has been around for generations to keep their doors open? How do they continue to stock their shelves to the extent needed to keep your business? The same is true for the car dealers, the grocery stores and the service companies. The impact is real and it hits local business owners trying to compete in the global economy the hardest.
Another example is the utility tax. In 2008, the Legislature eliminated the tax on business utilities, finally matching that exemption with the one also given to Louisiana residences. This session, several legislators want to raise that tax by rescinding all or some of that exemption for businesses. Who pays the business utility tax? Businesses of all shape and sizes. The chemical industry would pay roughly 20 percent of that tax, while transportation industries and retail providers would receive the next two largest hits. Every business of every size will pay this new tax. That local hardware store mentioned earlier trying to compete that is hit with the inventory tax gets hit with this one also, along with the local small restaurant owner trying to` keep their prices competitive with the chain restaurants and the dry cleaner hoping you keep coming to them for their service rather than doing it yourself.
Business taxes impact not only business owners, but also the customers by limiting choice and increasing prices. This reality affects businesses of all sizes, not just the big ones. It hits the big companies currently choosing to invest in Louisiana rather than other states. It hits the midsize companies looking to make that big jump this year and expand their operations. It hits the small companies doing everything they can to keep their doors open as Louisiana claws its way out of the national recession and suffers job losses due to low oil prices.
The employers of this state come in all shapes and sizes, but they all have one common trait. They believe in Louisiana and they work tirelessly every day to serve its people. They create the jobs that stimulate our economy, not government. They hire the people and make the investments that lead to tax revenues, not government. They have taken out loan after loan to fund their business and stimulate our local banks and lenders, not government. They are the first to donate to the local charity or civic organization in times of need, not government.
Thank you to the employers of this state for all that you do in our communities today, and all that you have done across this state for generations. You are the ones that make Louisiana’s economy work and we thank you for your effort. You deserve public accolades and much appreciation for all that you have done for our people, not criticism and false rhetoric in order to justify tax increases to fund government.
To business owners of all sizes, thank you for employing our people and driving the economy in our communities. The rhetoric being flippantly used by many to describe your effort doesn’t do service to your investments in Louisiana.