Governor Edwards approves business tax cuts and credits that will cost the state an estimated 25 million dollars in the current budget year, and at least 230 million dollars over the next five years.
The cuts come in many forms, including a substantial portion for the casino industry, and a yearlong suspension of the corporate franchise tax. Political Analyst Bernie Pinsonat says the the tax cuts and credits were legislative priorities for the GOP in the recent special session, but were limited in scope due to the state’s current budget constraints.
“It is a real balancing act right now for state government to cut some of these taxes and yet at the same time not hurt state government so we can pay for our services,” says Pinsonat.
The cuts and credits are aimed at helping companies who’ve been hammered by COVID-related economic loss. Pinsonat says it’s anyone’s guess as to whether they’ll make much of an impact.
“It is not a lot of money when you look at the total state budget, and how much does it help these companies? We really don’t know, but lots of them were struggling,” says Pinsonat.
Early in the special session, Edwards expressed concern about the fiscal responsibility of the proposed cuts and credits, but Pinsonat says the pandemic likely inspired him to step outside his comfort zone.
“His shutting down all those businesses, he knows they’ve been damaged, and the question is how bad they have been damaged. It may be different but I think the Governor came to the conclusion that most of the Legislature did,” says Pinsonat.
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