Culture Cash

by Jeremy Alford

A set of so-called "cultural economy" tax credits could help Lafayette realize a number of its development goals, from arts and architecture to entertainment and culinary delights.

Lt. Gov. Mitch Landrieu walked into the meeting of the House Ways and Means Committee flanked by an artist, a musician, a master chef and a bevy of economic development enthusiasts. It was an unlikely group to be cavorting around the State Capitol together, but its members have one thing in common during the ongoing regular session ' a set of far-reaching tax breaks designed to address what New Orleans Democrat Landrieu refers to as the "cultural economy."

The Legislature doesn't exactly have a solid tradition of supporting arts and entertainment, except for recent years' initiatives to bring tax credits for film and television, but the current fiscal picture is brighter than ever. With a record $3 billion surplus on the books from recovery spending and high oil prices, arts and culture boosters are hopeful their time has come.

Landrieu's legislative package consists of three parts that are expected to pass, and possibly even be expanded. It includes a program with local oversight to create "cultural product districts" and rehabilitate historic structures; tax credits for a wide variety of artists to live and work in Louisiana; and incentives to encourage food research and culinary arts. In several ways, the cultural economy package mirrors what many in Lafayette have been striving for over the past decade or so, especially downtown.

The cultural product district is outlined in House Bill 359 by Rep. Taylor Townsend, a Democrat from Natchitoches who is sponsoring the entire package. If ultimately passed by the Legislature, local governments could designate such districts starting next year for the "purpose of revitalizing a community by creating a hub of cultural activity, including affordable artist housing and work space." If eligible businesses are approved by the state Board of Commerce and Industry, they could receive state and local sales and use tax exemptions for works of art sold in the district. "This will allow local interests to expand beyond the typical downtown development district," says Angelle Davis, secretary of the Department of Culture, Recreation and Tourism.

The legislation also expands the amount of tax credits available for rehabilitating historic structures within such a district. Presently, the state has set aside roughly $1 million in credits to be used annually on historic buildings, but Townsend's bill would bump it up to $10 million, meaning as many as 400 structures could receive assistance each year, compared to only 40 currently. Davis says many areas of the state are planning to focus the credits on rundown areas, while others are building upon previous successes. "I know that Lafayette has talked about using these incentives to address blighted areas," she adds.

The second measure in the cultural economy package, House Bill 495, would create income tax exclusions for artists' work in varying amounts. The first $50,000 would be excluded entirely, while the next $50,000 would receive a 50 percent break. The following $400,000 would be eligible for 25 percent, and works exceeding $500,000 would get a 10 percent exclusion. And it's a wide net ' "artistic work" is defined as both contemporary and traditional in disciplines such as visual arts, craft, music, theater, dance, fashion design, literature and media.

Todd Mouton, director of the Louisiana Crossroads performance series and executive director of Louisiana Folk Roots, testified at the Capitol in favor of the legislation. He says the artist income exclusion would allow the state to not only sustain many of its artisans at home, but it would also put Louisiana in a position to cultivate new talent to continue competing on a global scale. "This is part of a great package, and it's the right step to take with minimal investment to show the state's artists we are serious about their contributions," says Mouton, who is also a member of the Acadiana Arts Council.

The final piece of the package is probably the most delicious, as it addresses state income tax credits for culinary arts and food-science infrastructure projects. Under House Bill 568, if the total base investment is greater than $15,000 but less than $150,000, each investor would receive a tax credit of 10 percent. If it's greater than $150,000 and less than $1 million, the credit would be 15 percent. For anything topping $1 million, the credit would jump to 20 percent.

Chef John Folse, who has been a Louisiana culinary mainstay for more than 25 years on radio and TV, called the incentive a "no-brainer," since part of the state's tourism appeal is directly related to food. In recent years he has built up his $50 million food empire, bolstered largely by a massive food processing plant in Donaldsonville that employs 200 people creating cheeses, meats and other manufactured eats. His company produces everything from chili for Disney World to a brown-sugar glaze for Friday's restaurants.

Next year he's planning an $8 million expansion and upwards to 100 new hires, and says he would have used the incentives if they were available when he started planning some time ago. "Had tax credits been available to me, you can imagine where we would have been," Folse says. "I would have reinvested the money and designed a $9 million expansion and hired more Louisiana people."

Landrieu says it's easy to generate excitement over food and entertainment, but many people shy away from dumping millions into growing the sectors, mainly because they're nontraditional markets for the state. He's trying to change that, and the Legislature appears to be falling in line. "You have to do the same thing for the cultural economy, from a tax policy perspective, as we do for other industries to help them grow," Landrieu says. "We can longer treat them differently."