The House Ways and Means Committee approves a resolution that would suspend severance taxes for the oil and gas industry for one year.
Ways and Means Chairman Stewart Bishop, who sponsored the resolution, says this substantial tax cut would save one of the state’s biggest industries.
“What else do you have left if you take the oil and gas industry out of the state of Louisiana? You have to give them an incentive to come back,” says Bishop.
In a normal year, the suspension would cost the state 514 million dollars, but with the current oil price collapse, that number would likely be lower this year.
New Orleans Representative Jason Hughes has received hundreds of emails in opposition from his constituents.
“Residents were expressing fear that if we were to pass this that the consequences would be devastating,” says Hughes.
The state budget is facing a potentially massive revenue hit due to the COVID shutdown, but Bishop says we can’t afford to let the industry disappear.
“We are going to have to make cuts, we don’t have a choice right now, but we also have to get businesses back to work,” says Bishop.
A recent survey of Louisiana oil and gas companies indicates massive layoffs and production shut-ins are imminent due to the oil price war and COVID shutdown.
Hughes opposed the resolution, asking if the industry could cash the windfall and still lay off workers.
HUGHES: “Would they be prohibited (from laying off workers)?
BISHOP: “No they wouldn’t be prohibited.”
HUGHES: “Would they be required to rehire any workers that they laid off in the past thirty days?”
BISHOP: “No they would not.”
the vote was 11-5, and the resolution moves to the House floor.
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