Jindal announces economic reform plans
BATON ROUGE - Today Governor Bobby Jindal announced today four economic development reforms he will pursue in the upcoming legislative session to make Louisiana more competitive than other states to secure economic development projects.
Governor Jindal said, "If our goal is to truly become the best place in the world to raise a family and start a career, then we must continue to make Louisiana more competitive with the rest of the country and the world. That's why we're proposing four new reforms to improve Louisiana's business climate so that we not only compete with other states for economic development projects but so we win and bring more new job opportunities here for our people.
The Louisiana Department of Economic Development estimates that these four proposals will generate at least 10,000 new direct and indirect jobs in the next five to ten years.
News 2's Mike Steele asked a local businessman if the proposals would help him.
We'll have his response to that question tonight at 6 pm.
The Governor's Office provided a synopsis of the plans:
First, the Governor is proposing to use a calculation that's increasingly common across the country, and offer targeted companies the opportunity to base their corporate income and franchise taxes on the amount of in-state sales they generate, rather than basing their taxes on a combination of sales, property and payroll factors.
Currently, the state is only using this approach for manufacturing and merchandisers in Louisiana. The new reform will extend this opportunity to other competitive projects that have the ability to generate tremendous growth for the state. These other target industry projects include corporate headquarters, data centers, logistics and warehousing, clean technology, destination healthcare, R&D operations, renewable energy, and digital media and software development. This option would only be offered for projects that yield a positive return on investment for the state. This bill will be authored by Rep. Joel Robideaux in the House and Senator Mike Walsworth will also carry the legislation in the Senate.
Second, Governor Jindal is calling for the state to offer a ten-year property tax exemption to attract companies in targeted sectors with the capacity to generate substantial new growth in jobs, sales and tax revenue. These targeted sectors include corporate headquarters, logistics and warehousing, data centers, clean technology, destination healthcare, R&D operations, renewable energy, and digital media and software development.
The Industrial Tax Exemption is now available only to manufacturers who are expanding or who are building new facilities in Louisiana. The exemption would be offered, as it is for manufacturers now, for an initial five-year term with an option to renew for five additional years. This would require the passage of a constitutional amendment by voters, and parishes would be given the opportunity to opt in or out of the program, based on an additional vote by parish governing authorities. This proposal will authored by Rep. Joel Robideaux in the House and Senator Neil Riser will carry the legislation in the Senate.
Third, Louisiana currently offers a payroll rebate of up to six percent for as many as ten years to companies who create high-quality jobs. The Governor's proposal will create a new incentive - valued at up to 15 percent - which would be offered only in highly competitive site selection processes.
Industries that would be targeted with this new incentive include corporate headquarters, clean technology, next-generation automotive, aerospace, destination healthcare, R&D operations, pharmaceuticals manufacturing, and renewable energy. This option would only be offered for projects that yield a positive return on investment for the state. This proposal will authored by Rep. Joel Robideaux in the House and Senator Neil Riser will carry the legislation in the Senate.
The fourth and final proposal focuses on bringing more corporate headquarters to Louisiana. Under the proposal, for significant corporate headquarters projects, the state will offer a 25 percent rebate over five years on qualifying relocation costs to companies that move their facilities to Louisiana.
In today's economic environment, states offer highly competitive incentive packages for the opportunity to be home to thousands of direct headquarters jobs and indirect jobs generated by Fortune 1000 companies. To be eligible, companies would need to pay salaries at twice the average private-sector wage in the parish where they relocate, or at least $60,000 a year. This option would only be offered for projects that yield a positive return on investment for the state. This proposal will authored by Rep. Joel Robideaux in the House and Senator Neil Riser will carry the legislation in the Senate.
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