Letter: Consider new approach to doling out tax breaks

http://theadvocate.com/csp/mediapool/sites/Advocate/assets/templates/FullStoryPrint.csp?cid=11687504#&preview=y

 

Letter: Consider new approach to doling out tax breaks

Congratulations on your articles about the special tax breaks that certain companies (and even individuals) get. They were very timely, given the state budget troubles in the news.

I think many people would agree that the tax breaks we give out should not come at the expense of the basic functions of state government.

Nevertheless, we may decide that the tax breaks are valuable. How about the following approach?

During the upcoming session, the Legislature and the governor can agree on the proper levels of taxes and spending for the 2015-16 fiscal year. They also can agree on an amount to be given away in tax breaks.

However, none of the tax breaks would be given out in 2015-16. Instead, we would wait for the end of the 2015-16 fiscal year. If the budget projections are on target, and revenues come in, then the tax breaks would be fully funded as agreed upon. But if the price of oil stays too low, or sales taxes are disappointing, then the shortfall would be made up out of the tax breaks. That is, if the budget ends up $100 million in the red, then the amount of tax breaks available would be reduced by $100 million. Then, starting on July 1, 2016, the tax breaks would be implemented, and companies and people could earn them by building factories or making movies in Louisiana, or by installing solar panels on their houses — but only up to the amount that is available.

With this plan, the tax breaks can still benefit the state, except that we won’t give out any more than we can afford.

Andrew Maverick

professor

Baton Rouge