Posted by: Tim Mathis
This month, a bill was presented before the Missouri Senate that proposes to reform, sunset, or permanently repeal 61 tax credit programs which cost the state $521.5 million last year alone. The bill is a product of a report released by a Tax Credit Review Commission held last fall which evaluated individual programs for their returns on investment and made recommendations for greater efficiency. As in virtually every other state, Missouri faces a significant budget shortfall in the upcoming fiscal year. Over the past decade, state tax credits grew by 408 percent, far outpacing the growth in revenue which increased by only 13.9 percent during the same time period.
The commission was made up of 27 legislators, business, and community leaders representing diverse backgrounds and interests. Just as businesses need to continually review the value of their investments, it is even more important for states that spend public dollars on economic incentives to demonstrate transparency and accountability.
Louisiana needs to follow Missouri’s lead to ensure that every penny is well spent. A projected $1.6 billion shortfall ought to spur a conversation on the value of our economic incentives for job creation and the future growth of our state. Last year, Louisiana spent over $420 million on 25 tax credit programs, much of which was spent on only several programs:
- Motion Picture Investor Tax Credit: $164.2 million.
- Enterprise Zones: $109.5 million.
- Louisiana Quality Jobs Program: $87.8 million.
- Research and Development Tax Credit: $19.4 million.
- New Markets Tax Credit: $17.7 million.
- Industrialization Tax Equalization Program: $14.4 million.
A Tax Credit Review Commission would encourage public oversight of these programs and prompt a dialogue on how the investments improve the quality of life of state residents.