(The Center Square) — The Louisiana Economic Development Department provided an in-depth analysis of its major incentive programs at a joint hearing in front of the Louisiana Legislature on Wednesday.
While state economic development officials say the fiscal returns on many of these programs are negative, they also say that there is a positive economic return on the investment by taxpayers.
The Quality Jobs program was highlighted during the the House Ways & Means/Senate Revenue & Fiscal Affairs hearing as a key component of the state’s economic development strategy. This program, designed to incentivize higher-paying jobs in various industries, offers payroll rebates ranging from 4% to 6%, depending on the wage level.
The program’s benefits are reaching small businesses across the state, the LED said.
“More than half of the companies using quality jobs employ 50 people or less,” said Ileana Ledet, LED’s chief economic competitiveness officer. “These are jobs that are really having an impact on the community, on households in these areas. But right now we’re looking at more than 100 companies who’ve cited quality jobs as a factor in their decision.”
According to the LED, the program has generated a 70-cent economic return on every dollar spent, with a smaller fiscal return. This highlights a broader issue faced by various incentive programs in achieving positive fiscal outcomes.
The economic development department also addressed the challenges posed by competing states with lower corporate income tax rates and more flexible deal-closing funds. States like Texas, Tennessee and Florida offer lower corporate tax rates and have substantial deal-closing funds.
The department is exploring improvements in site development, noting that other states are making significant investments in ready-to-use sites to attract businesses.
According to Ledet, “all of the incentive programs that they looked at…have a positive economic return on investment. All of them have a negative fiscal return on investment.”
The Motion Picture Production Incentive offers up to 40% in rebates, including a base rate of 25% and an additional 15% for hiring Louisiana residents, with an extra 5% for spending outside the Greater New Orleans area and 10% for Louisiana-created content.
This incentive has established Louisiana as a top global filming destination, contributing over $51.7 million in state and local tax revenues and supporting more than 10,000 jobs. The reported economic return is approximately $6.32 for every dollar spent in credits, according to Christopher Stelly, an executive director at LED specializing in the entertainment industry.
“The Motion Picture Production Incentive has delivered substantial economic benefits and driven significant investment in workforce training and education across the state,” Stelly said.
According to Stelly, the program has supported various educational initiatives, including partnerships with LSU, the Prize Foundation, and Cool Cooperative, investing over $9.8 million in workforce development specific to the film industry.
