Legislators cautioned by business community

Published 12:00 am Wednesday, April 7, 2004


The Legislature took a step forward for economic development in the recently completed special session. Urged on by Governor Blanco, legislators passed legislation that will phase out two onerous business taxes that have impeded economic development. Now that those bills have passed, there will be a tendency among some in the Legislature to say: “We have finished the economic development agenda.”

Unfortunately, there is much more that needs to be done. First on the list is not to do any damage to Louisiana’s business climate during the regular session of the Legislature.

Legislators will have ample opportunity to do some backsliding on economic development during the current session. A whole laundry list of bills have been introduced that will send out very damaging signals if they show any signs of life in the legislative process.

The first major area of concern has to do with property tax legislation. One of the major areas of tax reform left untouched has to do with Louisiana’s antiquated and discriminatory property tax system.

The presence of the nation’s highest homestead exemption ($75,000) places the burden of the tax squarely on business and commercial interests.

Business interests pay over 90 percent of the property taxes in Louisiana.

The high millages that result from making so much residential property exempt from ad valorem taxes led state government to create a ten-year exemption from property taxes on facilities and equipment (not land) for industrial plants in order to lure them or keep them here.Bills have been introduced that would compound the problems with our property tax system.

Some would increase the homestead exemption to as much as $150,000, and others would weaken or lower the industrial tax exemption. Either way, passage of these bills will reinforce the image of Louisiana as a state in which business is routinely asked to pick up the tax tab for individuals. The areas of lawsuits and workers compensation present additional concerns. Bills have been filed that would begin to undermine the joint and several liability reform passed in 1996.

Before that reform passed, if you were a defendant in a lawsuit along with other parties and the others did not have the financial means to pay their portion of a judgment, you were responsible not just for your percentage of fault but that of the others as well.

If Louisiana goes back to that system, it will be a clear signal that the major civil justice reforms passed in 1996 cannot be considered safe.

In workers compensation, bills have been introduced that would water down the exclusive remedy protections of the law. Workers compensation is a no-fault system. Regardless of who is at fault for a workplace injury-the employer or the employee-the law makes sure that the employees’ medical costs are covered, and they are compensated for work missed due to the injury.

Some legislators now want employees to be able to sue in tort instead of receiving workers compensation as an exclusive remedy. This certainly would have a very negative effect on Louisiana’s economic development image.

Other legislation damaging to Louisiana’s business climate include bills that would: impose a state minimum wage (higher than the federal one); water down the K-12 education accountability program; and place huge financial burdens on industries that have to lay off workers.

If any of these bills pass, the progress toward a better business climate achieved in the special session will be eroded by the damage caused in the current one.

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