By DAN JUNEAU

Forty chambers of commerce and business associations have joined together to support two bills in the current legislative session that would, in their opinion, result in jobs, economic growth and investment in Louisiana.

The continuing outmigration of our more highly skilled and educated workers continues to call attention to the need for economic expansion in Louisiana before the job losses and worker migration creates an economic slump hard to end.

The Public Affairs Research Council hit the nail on the head in its recent comparative study of the business tax burden in southern states when it identified the inclusion of debt in the base of the corporate franchise tax and the imposition of a sales and use tax on business equipment and machinery as the two largest obstacles preventing Louisiana from being competitive with its southern neighbors.

The PAR study charts the path to competitiveness, while another study by Dr. Tim Ryan of the University of New Orleans translates “competitiveness” into the number of jobs Louisiana is missing by continuing to impose these two taxes that most states do not collect.

In the conclusion to his study, Dr. Ryan notes: “Louisiana is one of the few states in the United States that fully taxes business machinery and equipment sales under the retail sales tax and includes debt in the base of the corporate franchise tax, thereby resulting in a larger than average corporate franchise tax liability for a typical firm.

“These two forms of business taxation are particularly damaging from an economic development point of view because they tax the process of investing in the state – when firms buy new equipment and when corporations borrow to increase the size of their capital stock. The last thing a state like Louisiana needs is to tax investment and create additional disincentives for businesses to invest.”

Dr. Ryan’s study shows that, when fully phased in, these two changes in the manufacturing sector of our economy alone would create new direct spending of $1.7 billion and an additional $1.5 billion of secondary spending.

This additional $3.2 billion in spending would result in the creation of more than 43,000 new jobs in a state that desperately needs to create more good-paying jobs.

Dr. Ryan goes on to state that the estimates in his study are very conservative for three reasons: “First, we assume that after the first four years, the new investment will be replacement investment. Given that the average life of capital investment is considerably longer than four years, the assumption is very conservative.

“Second, the analysis in this report only looks at manufacturing investment. The reduction in the corporate franchise tax will affect other industries that are not estimated in this report. Third, these estimates do not take into account the effect that the proposed tax reform will have on the business climate of the state. Any move that the state of Louisiana makes to reduce business taxes across the board will serve to improve the business climate significantly. An improvement in the business climate will give the Department of Economic Development more tools to aggressively market the state of Louisiana. The impact of this business climate change could dwarf the impacts estimated in this report.”

Billions of dollars in new investments and 40,000 critically needed higher paying jobs. It is not surprising that many groups are supporting this legislation and many legislators have signed on as coauthors of the two bills.

What is puzzling is why some elements in state government are trying to derail the legislation by injecting class warfare and divisions between small and large businesses into the debate.

Jobs, growth and opportunity are important to every citizen of Louisiana and to all businesses, large and small.

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