Stephen Waguespack, president of LABI since 2013, spoke at the Zachary Rotary Club on July 14. He was invited by Kate MacArthur.
“The state is in a recession with no end in sight on the pattern of tax changes affecting employers,” Waguespack said.
As the state’s chamber of commerce and manufacturers association, the Louisiana Association of Business and Industry is the largest business advocacy group in the state, representing more than 2,500 business members of every size and in every sector and region.
According to a LABI summary report about the impact of new laws on employers passed in the second special session of the Louisiana Legislature, which adjourned on June 24 after a record-breaking 19 weeks in 2016, the focus again was on raising taxes.
In the most recent fiscal session, the state Legislature passed roughly a dozen new tax bills that primarily targeted business income taxes and related credits, totaling more than $90 million annually for state programs and services, said Waguespack.
“The newest changes to the tax code come on the heels of more than $1 billion raised on employers for (financial year) 2017 in the prior two fiscal sessions over the past year,” he said. “Despite more than $4 billion in new taxes on both individuals and employers that the state is projected to take in over the next five years, state officials consistently declare that still more revenue is needed to fully fund government.”
For the Louisiana business community, the report finds combined impact of taxes raised in the 2015 and 2016 legislative sessions are: a $575 million tax increase on employers in fiscal year 2016; a $1.33 billion tax increase in financial year 2017; and a $1.35 billion tax increase on employers in financial year 2018.
“At a time when Louisiana manufacturers are already grappling with ever-expanding federal regulations, funding new health care mandates and fighting excessive litigation, state officials have now enacted three rounds of tax changes that take direct aim at this vital sector of the state’s economy,” added Waguespack.
The impact of the tax changes number in the hundreds of millions of dollars annually for Louisiana manufacturers who represent one-fifth of the total economic output of the state and employ nearly 150,000 workers with an average salary of $82,150.
“With over 19,000 jobs lost in the past year, state officials should be working overtime to improve conditions for manufacturers to create more high-skilled, high-paying jobs, however, the wants of state government have clearly prevailed over the needs of the Louisiana economy,” Waguespack said. “The time for short-term revenue quests with little regard to the real-world impact must end, and getting the long-term solution right is absolutely critical as the Louisiana economy struggles through a recession.”
For LABI's overviews on the employer tax burdens, presentations on taxation and finance or to better understand the Louisiana state budget and what can be done to fix it, visit labi.org.