BATON ROUGE — Today, Governor John Bel Edwards commented on a report from the Louisiana Legislative Auditor that projects that in fiscal year (FY) 2015 the state will give away $400 million more in tax exemptions than it received in tax collections during the same year.
The report finds that Louisiana’s Department of Revenue is projecting the state will take in a total of $7.5 billion in tax revenue in FY 2015, but will give away approximately $7.9 billion in tax exemptions during the same time-frame.
“This is simply not sound fiscal policy. At a time when our state is faced with hospital closures and deep cuts to higher education, this $400 million would help us close the $940 million deficit this year,” Gov. Edwards said. “We can no longer afford to give overly generous tax breaks to business. It is time to stabilize our budget and broaden the base of our tax code, so that our people who work and educate their children here and the corporations that do business here are all treated fairly.”
The audit report further noted that, while most state tax revenue is generated by 40 different taxes, Louisiana now grants 464 different tax exemptions, a count that has steadily increased since 2010. The report also found that, of those 464 tax exemptions, only 52 have sunset provisions. According to the report, the vast majority of tax exemptions continue indefinitely without any evaluation of their impact or benefit to the state.
Legislative Auditor Daryl Purpera recommended the following:
- That all new or modified tax exemptions contain clear performance statements that include their public purpose and their expected outcomes.
- That the legislature should develop a schedule for how often reviews should be conducted or attach sunset dates to all exemptions that dictate when they should be reviewed.
- That the legislature should designate who specifically will conduct reviews of tax exemptions and what criteria will be used for reviews.