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John Alario: Bobby Jindal will propose saving the state around $500 million by refundable tax credit alterations

http://www.nola.com/politics/index.ssf/2015/02/john_alario_bobby_jindal_will.html

Senate President John Alario said Gov. Bobby Jindal will propose saving the state around $500 million by changing some of Louisiana's refundable tax credit programs during the governor's budget presentation Friday morning (Feb. 28).  

Jindal has said repeatedly that he would be willing to consider scaling back some refundable tax credits to help plug the projected $1.6 billion hole in the upcoming budget. The governor is willing to cut the amount of money Louisiana gives out through the refundable program that is above and beyond the taxes owed. 

Louisiana's 28 refundable tax credits cost the state around $777 million per year, but 75 percent of that money is spent on payments that go above and beyond taxes owed to the state. This means Louisiana spends about $590 million giving away money that would never actually be paid in taxes. 

Alario said he couldn't provide specifics about which refundable tax credits Jindal would consider altering, but the governor has already indicated he won't scale back a few of these programs that benefit the poor

Below is a chart provide by the Louisiana Department of Revenue that includes the refundable tax credits available and initial estimates about how much is spent on each program. The dollar figure listed under "Amount refunded that doesn't offset tax" is what Jindal would consider altering.  

(Note: As mentioned above, the governor has already indicated that he isn't interested in changing a few of programs listed below -- including the Earn Income Tax Credit and school readiness benefits -- so it's unlikely that those credit payments would be reduced. The two programs benefit low-and-moderate income families.) 

Louisiana's Refundable Tax Credits
List of Refundable Tax Credits Total amount spent Amount offsetting tax Amount refunded that doesn't offset tax
Inventory Tax Credit 452,676,421 75,961,191 376,715,230
Wind & Solar - Total 63,441,215 6,280,828 57,160,387
Ad Valorem Credit for Offshore Vessels 56,406,978 13,356,040 43,050,938
Research & Development 24,380,813 794,852 23,585,961
Earned Income Credit 47,849,737 26,450,670 21,399,067
Citizens Insurance Credit 45,677,785 33,546,054 12,131,731
Musical & Theatrical 8,754,604 185,497 8,569,107
Child Care Refundable 13,773,978 5,278,644 8,495,334
Digital Interactive Media 6,685,889 6,963 6,678,926
School Readiness - Directors & Staff 8,114,353 2,303,078 5,811,275
Telephone Co Property Tax Credit 22,643,842 17,381,873 5,261,969
School Readiness ChildCare Provider 4,662,556 256,260 4,406,296
Ad Valorem Credit for Certain Natural Gas 4,534,210 551,179 3,983,031
Vehicle Conversion to Alternatiave Fuel 4,148,005 878,471 3,269,534
Sugarcane Trailer Conversion 2,744,431 23,053 2,721,378
School Readiness Refundable 2,383,775 85,643 2,298,132
Milk Producers 1,555,702 112,401 1,443,301
Angel Investor 1,568,555 690,898 877,657
Digital Interactive Media & Software 752,312 328,766 423,546
School Readiness Business Supported 624,842 275,367 349,475
School Readiness Fees & Grants 596,792 250,030 346,762
Quality Jobs Rebate 2,529,606 2,236,046 293,560
Retention & Modernization 180,941 18 180,923
Technology Commercialization 201,377 27,030 174,347
Historic Residential Rehab 275,657 149,345 126,312
La Hunting & Fishing Licenses 131,204 107,302 23,902
Mentor-Protégé 15,584 7,250 8,334
Property Insurance Credit 34,939 26,899 8,040
Total 777,346,103 187,551,648 589,794,455

FOR MORE INFORMATION

Contact: Cami Geisman
225.219.0270  |  Cami.Geisman@la.gov


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