Bobby Jindal’s ‘economic miracle’ is a mirage

By Robert Mann

Did you know that Louisiana is an economic paradise? Are you aware that business executives stampede here with a fervor not unlike that of the 1849 California gold rush?

I know what you’re thinking. Like me, you’re skeptical. You’ve noticed that Louisiana has the nation’s fourth-highest unemployment rate, some of the deepest poverty, the worst health outcomes and an incarceration rate that is the envy of Uzbekistan. Despite overflowing prisons, violent crime plagues us. Our roads crumble, our coast vanishes and chaos reigns in public education.

The state’s economy is so decrepit it does not produce enough tax revenue to support higher education, health care and other vital services. As you read this, Louisiana lawmakers are trying to avert disaster and eliminate a $1.6 billion budget shortfall.

Well, you and I have been reading all the wrong publications! Earlier this month, “Chief Executive Magazine” declared Louisiana the seventh-best state for business. “During 2015, Louisiana showed strong improvement in attracting and retaining technology businesses, while also benefitting from a downstream position in oil and gas,” the publication declared. “CEOs are pleased with the Southeastern state’s industrial incentives, cheap energy and non-union workforce.”

That’s not all. Last year, “Site Selection” magazine dubbed Louisiana as the nation’s second-best business climate. Earlier, “Business Facilities” magazine ranked our business climate as the nation’s best.

Among other things, these rankings gauge Louisiana’s corporate tax rates, its proximity to transportation hubs, its non-union workforce, and, most of all, as “Chief Executive Magazine” noted, our “industrial incentives.” Some of those “incentives” are what Gov. Bobby Jindal now calls “corporate welfare.”

Such profanity won’t please the people who run these publications. Jindal needn’t worry. He will have vanished from Baton Rouge long gone before their editors take notice and issue downgrades for our newfound aversion to “corporate welfare.”

Still, the question remains, how does a state that so many observers claim has a robust business climate fail to generate enough revenue to balance its budget? The answer, of course, is that our governor and his legislative enablers have handed big business the keys to the state treasury for seven years. They eagerly bestowed enormous tax exemptions and direct state appropriations on dozens of out-of-state corporations, all after recklessly slashing income taxes for the wealthy in 2008.

And what did these income tax cuts and governmental largesse for business get us, other than nice reviews in magazines that no one reads? According to a report by the congressional Joint Economic Committee, not much. “In March, private-sector employment in Louisiana fell by 2,000 jobs,” the committee staff reported. “Over the past year, Louisiana businesses have added 19,400 jobs. This compares with an increase of 35,200 jobs over the 12 months through March 2014.” The unemployment rate in Louisiana was 6.6 percent in March 2015, down 0.1 percentage point from February. The rate was 1.1 percentage points above the national rate of 5.5 percent.”

Continue reading on NOLA.com at this link.

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2 Responses to Bobby Jindal’s ‘economic miracle’ is a mirage

  1. Stephen Winham says:

    I’ve done some real soul-searching about this. As I compare the points you make in this column with articles in business publications (and some other publications and blogs) originating from enlightened places far removed from Louisiana coupled with statements made here and elsewhere by Governor Jindal, I can only come to one conclusion: Governor Jindal has made Louisiana the best state in the nation in all respects, but most of us are just too dumb to see it. The captains of industry get it. We don’t.

    Although I lack the intellect to really understand the dissonance, here’s my guess: The economic miracle consists entirely of the incentives, tax breaks and lax regulation of which businesses are the recipients. Everything else trickles right on down. As far as the government is concerned, it just gets in the way of progress, so who cares if it goes belly up.

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  2. Gregory Foreman says:

    Such articles must be viewed from the perspective of the publications writing them. All three publications, Chief Executive Magazine, Site Selection and Business Facilities, are industry subservient publications. When viewed from that perspective, one can better appreciate the motivation underpinning the article. Such publications are not concerned with the quality of life for Louisiana citizens, the quality of health care, educational systems, roads, fire and police protection, etc., that is not their job. They are concerned with publicizing which states will provide the best financial opportunities, as in “free stuff”, for locating in a given state. That is there job and they perform their job admirably. From that standpoint, I can’t argue their point. Jindal has made a policy of “whoring” out Louisiana in the name of economic expansion.
    Louisiana, in the pathetic form of Bobby Jindal, via the LED, Louisiana Economic Development, has given away on a yearly bases more state revenue than any other U.S. state. An average of $1.50 billion in “economic incentives” is handed out by LED yearly. The fact that these “incentives” are awarded for ten years translates to a ten year loss of this revenue. [I hate being so literal, but I couldn’t find another method of presentation or composition.] Pathetically, that is the good news! From this point the news gets worse, potentially much, much worse. Why, because many of the “economic incentives” LED’s awarded have yet to be expedited. Projects such as the SASOL’s GTL refinery in West Lake and Shell’s GTL refinery in Norco have either been postponed, SASOL, or shelved, SHELL OIL. The proposed SASOIL plant secured an estimated tax benefit, i.e., credit, to the tune of $3 billion in property tax exemptions, the Industrial Tax Exemption, costing Calcasieu parish some $300 million a year in revenue, plus the Competitive Projects Payroll Incentive providing a credit equal to 15% of gross payroll for ten years, cost to state, $1.90 billion, a grant of $115 million for land acquisition, plus, state financed training of SASOL’S employees at SOWELA TECK, cost to state, $20 million.
    The effectiveness of Jindal’s largess is questionable. Over Jindal’s tenure as governor, while giving away billions in economic incentives, Louisiana has dropped from a ranking of 32nd in 2008 to a ranking of 35th in 2015.[Tax Foundation, State Business Tax Climate] Summation: while Jindal’s “giving away the farm” in an attempt of attracting and expanding businesses, Louisiana’s ranking to businesses from a tax standpoint has continually dropped. Conclusion: Jindal either doesn’t have a “handle” on Louisiana’s strongest assets from a business standpoint or he is more interested in the “show” aspect of business expansion for photo-op purposes—the answer is both. Jindal’s “economic miracle” is nothing more than a “political sleight of hand” being sold the state and the nation by his loyal staff of Kool-Aide peddlers. Sorry, I’m not thirsty.

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