Louisiana

Louisiana is perhaps best known for being the only state to allow a state board to unilaterally abate local taxes, a practice that started in 1936 and lasted until 2016, when the governor by executive order stripped this authority from the Industrial Tax Exemption Program. Even though localities can now opt in or out of this program, it still drains a fortune in public dollars.  

Louisiana is also known for huge subsidies for energy projects and film productions. Louisiana’s Department of Economic Development (LED) manages most programs. Applications for the Enterprise Zone, Industrial Tax Exemption, Quality Jobs, and Restoration Tax Abatement programs are reviewed by the Board of Commerce and Industry, which consists of individuals appointed by the governor.   

The LED maintains a portal that has information on approved and pending projects, but only for the four board-certified programs above, and the downloadable spreadsheets include only the first-year tax benefits. The department website contains summary reports, economic impact analyses, and older (pre-2018) projects approved by the board that even had 10-year estimate for the costs. There is no disclosure of the recipients or project-specific outcomes for the Motion Picture Tax Credit, which costs the state over $150 million a year.  

The Department of Revenue publishes a fairly detailed “tax exemption budget” every year. Some 18 tax abatement programs are presented in a table format in the Annual Comprehensive Financial Reports (ACFRs) by the Division of Administration in the governor’s office. Local governments generally comply with Statement No. 77.  

Even though the LED does publish program evaluations, these do not provide detailed cost-benefit analyses. And reviews done by the agency that administers the program in question or firms commissioned by the agency could be biased because negative findings suggest the agency’s failure. The Legislative Auditor did issue an evaluation on the Quality Jobs Program in 2020 that had a fair amount of in-depth analysis of the costs and benefits. This should be replicated with other programs.