The LABI Report: Special session: jobs or rhetoric?

Published 12:00 am Saturday, February 23, 2002


In late March, the Legislature will be called into one of our perennial special sessions.

This one is being referred to as an “economic development” special session. That name conjures up a vision of state policy-makers with determined looks on their faces going about the business of reversing the alarming trend of job losses and business relocations that have plagued Louisiana for several years now.

Unfortunately, that image may not present a realistic view of what will happen when the Legislature comes to town.

What may be more likely to occur is a continuation of state government’s fascination with state government. Legislators are already being invited to the Capitol for pre-session briefings. If state leaders were serious about creating and retaining jobs, those briefings would be about private sector solutions to the problems plaguing our economy.

Instead, the briefings – as always – are about the budget, state government, maintaining high spending levels and maximizing government revenues.

Rarely, if ever, do those briefings focus on the private sector that feeds the revenues to the public sector.

For many months now, business groups, economic developers and research organizations have been meeting in conjunction with representatives of the Foster administration to develop a package of proposals that would make Louisiana more competitive with other states in the realm of economic development.

It will be interesting to see if the proposals developed by those groups make it into the special session for economic development, or if the many meetings held were simply window dressing.

Early signs indicate that the special session may not be about removing disincentives for economic growth and creating a few new strategic incentives to make us more competitive in the quest for jobs. Instead of being a session designed to help Louisiana compete for the manufacturing jobs that are the revenue drivers of any economy, the special session at this point appears to be focused towards sports franchises and government.

Following on the heels of the special session will be the fiscal-only session of the Legislature that begins April 29. If not included in the special session, the aforementioned economic development package focused on the private sector will be pushed in the fiscal session by legislators who are concerned about job creation and retention.

Elements of that package include a phased reduction in the state sales tax on business machinery and equipment, a gradual elimination of the debt component of the corporate franchise tax, and a reworking of the Quality Jobs Program to allow more access to small businesses.

These first two elements reduce or eliminate two major disincentives to job creation and investment in Louisiana (and do it with little – if any – impact to state revenues).

The third creates a targeted new incentive to improve our ability to compete with other states for jobs.

Many legislators have already signed on as coauthors of the bills that will spur private sector investment and job creation, and that’s a good sign. But those bills are a long way from being signed into law. There are reports that the House Ways and Means Committee has been asked to bottle up any bill that would reduce taxes – even if the legislation is needed to spur economic activity which would generate more revenue for the state.

John Q. Public probably finds most legislative sessions confusing, and with just cause. But those who are concerned about the loss of jobs and the out-migration of our best and brightest to jobs in other states should not have a hard time following the debate in the upcoming sessions.

All they have to do is see if the focus of the policy-makers is on growing the private sector or the public sector.

Rhetoric can’t hide facts, and our state officials are either going to be proactive in making Louisiana more competitive for private sector jobs, or they are going to continue state government’s obsession with state government.

DAN JUNEAU is the president of the Louisiana Association of Business and Industry.