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LABI president outlines key legislative issues


March 30, 2017
By Jordon Legendre
Originally Posted on Houma Today

Fiscal and criminal justice issues, legal reform and infrastructure are four key areas local businesses should keep an eye on during the upcoming legislative session, the leader of the Louisiana Association of Business and Industry said today.

LABI President and CEO Stephen Waguespack spoke to local business leaders as part of his group’s Legislative Outlook Tour during the Houma-Terrebonne Chamber of Commerce meeting in Houma. Waguespack’s remarks came a day after Gov. John Bel Edwards released his tax plan to be considered during the legislative session, which begins April 10.

Waguespack expressed concern about Edwards’ centerpiece proposal, a new tax on gross receipts called a Commercial Activity Tax, estimated to raise up to $900 million a year from businesses.

Also known as a gross receipts tax, the new plan would tax businesses on sales without looking at profit margins or expenditures.

Waguespack said this new tax would encourage vertical integration, a process where businesses handle more than one stage of production, which would have a negative impact on Louisiana’s service-based economy.

“We’re especially worried about those small-margin businesses,” Waguespack said. “We have a service-based economy. Those are the type of companies that I think are at risk under this because if we’re encouraging vertical integration it’s harder for that type of contract ownership relationship to go forward.”

On criminal justice reform, Waguespack noted Louisiana has the highest incarceration rate per capita in the country, with the number of nonviolent offenders in prison driving those numbers up.

“We have got to stop the cycle,” Waguespack said. “It’s expensive. It’s not helping solve crime. There are young people who should be at a job training program or a drug treatment program that hopefully will get them back into becoming a productive member of society.”

Waguespack said LABI, which serves as Louisiana’s official state chapter for the U.S. Chamber of Commerce, has worked with local communities and legislatures to find solutions to problems with sentencing laws and ensuring job training programs are training offenders for jobs of the future.

The lawsuits proposed by Gov. John Bel Edwards against oil and gas companies for damage to the state’s wetlands have also had a negative impact on the business climate, Waguespack said.

Edwards say the lawsuits are necessary to make the oil companies fix wetlands they promised to repair. Waguespack said the lawsuits make businesses hesitant to invest in Louisiana and warned the lawsuits could spread to other industries.

“There are deep pockets in every other industry, not just in oil and gas,” Waguespack said. “If this precedent is allowed to continue, it’s a template that can be replicated time and time again. This session, you need to be watching out for bills that are going to try to sneakily make this easier to do.”

Waguespack said infrastructure is an area where most of the state is in agreement that improvements need to be made. But the issue defines the lack of trust by citizens on how government spends money after years of seeing promised improvements not delivered.

“The governor himself,” Waguespack said, “has to come out and say, ‘These are the exact amount of tax dollars I’m asking for, these are the exact new projects I want to build and this is the exact accountability and transparency that I’m going to show you.’ The governor has to do that.”

Waguespack said the election of President Donald Trump was a sign people were ready for change, and he believes the business community has to be involved in making change for Louisiana.

“The real issues aren’t comfortable,” Waguespack said. They’re politically tough, and the business community has to step up and get back into a leadership role and take on some of these issues because without it, it’s going to be really hard to get to those big issues.”