Six Louisiana state government agencies that administer more than $1 billion in tax incentives to corporations are not following the law, either failing to report on whether those incentives are offering a justifiable return on investment or by submitting incomplete reports, according to a new analysis by the Louisiana Legislative Auditor.
In total, the tax credits and rebates offered by the state equals $1.6 billion in lost tax revenue for the state (for the fiscal year that ended June 30, 2015). In 2013 the Legislature passed and then-Gov. Bobby Jindal signed Act 191, which requires the state agencies that administer the tax incentives to report to lawmakers whether those incentives meet their intended purpose — spurring economic growth and/or creating jobs.
However, in a recent audit, the LLA found that 46 of the 79 tax incentive reports the agencies were required to submit — 58 percent of all reports — “were either not submitted or did not comply with all of the reporting requirements,” according to the audit report. Those 46 incentives represent roughly $1.1 billion in lost tax revenue to the state.
“In addition, return on investment information was not consistently reported to the Legislature,” the report continues. “As a result, the legislative committees charged with making decisions to change or eliminate costly incentives are not receiving the information they need due to agencies failing to fully comply with the reporting requirement.”
The report cites four agencies in the audit: the departments of Revenue, Economic Development; Culture, Recreation and Tourism; and Environmental Quality. Of those 46 reports, 38 were submitted but didn’t meet mandated reporting requirements; the other eight were not submitted at all.
Read the full report, including responses to the LLA from the agencies cited, here.