How to Build Real Economic Development in Louisiana
By Christopher Tidmore...
Candidates receive all kinds of questions when they run, but the best one I have received so far is what can you do in real terms as a legislator to bring real "economic development" to Southeast Louisiana.
Yes, we want to become competitive with other Southern states and eliminate the taxes on debt, equipment, and inventory, but frankly, just equaling what our neighbors have done for years will not be enough.
The goal implicit in the term "economic development" is to provide the inhabitants of a region--and those wishing to invest in that region--a realistic expectation that there will be tangible opportunities for commerce and employment, that the leaders of that region will take its cultural and geographic strengths and parley them into prosperity and active trade.
The definition, therefore, of economic development in the context of the Southshore should be defined as using our realistic cultural and geophysical assets to restore an expectation by our young people that they will have opportunities.
Most of our brightest youth lack any serious hope that they can make a comfortable living, so they leave, not just Jefferson Parish, or the Greater New Orleans area, but Louisiana. Out of my graduation class fifteen years ago from St. Martin's, out of 54 students, only 18 remain in Louisiana. And, six of those were planning on leaving in the next year.
Yet, at my 15th reunion, I asked my one time classmates if they could make within $5,000 of their current salary, in their professions, would they return. All but two said, "In a second." Most added that they would return if they could earn within $10,000.
Armed with that knowledge, I have spent the two years post-Katrina attempting to parley our cultural assets into job opportunities that would appeal to those with a love of this region. Ten months after the storm, my friend Roger Wilson and I were driving down a still darkened Canal Street. We looked at the shuttered theatres and said that they could gleam again with Broadway shows and music concerts.
Using the experiences of Branson, Missouri and Louisiana's own successful film tax credits, Roger and I put on paper an initial proposal that--with the input and tireless work of a large and talented team of people--grew into the recently passed Broadway South tax credits, that promise to make Louisiana the launching point for national tours for live, legitimate productions of from ballet to Jazz, Tim McGraw concerts to the test tours of High School Musical.
The tax credits were also designed to apply to all the "below the line" businesses that would outfit these national touring companies. Credits would go to locals, from the carpenters that built the sets, to the travel agents that booked the hotels, to the caterers that fed the crews.
There were many people who worked countless hours to pass the legislation, and all deserve credit for their work. The essential point is that we took the region's strength, our cultural assets, and tried to expand them into providing opportunities in other industries.
It is attitude we have often lacked towards our geographic advantages. Thomas Jefferson bought Louisiana because of the Mississippi River, yet 200 years later, what could be the largest single port system on Earth is divided into squabbling parish subdistricts that lack the lobbying clout to win sufficient capital investment or the business clout to compete the increasingly containerized international shipping industry.
While Texas and Alabama pour hundreds of millions of dollars into the Houston and Mobile port systems, our legislature tends to virtually ignore our ports, and the critical role they play towards the economy of Louisiana.
Partially, that is political myopia, but in part it is port directors literally competing against one another, and business people having little incentive to invest in value added industries spinning off from the goods transshipped into our ports.
Not only could our legislature promise increase capital funding for containerization of our ports, but it could make that funding contingent upon the ports jointly seeking international shipping contracts and generally working together.
An innovative notion, though, would be to provide both industrial tax exemptions and corporate income tax credits to industries that will take items shipped into the region, and either through assembly or processing, transform those goods into finished products. The tax credits could be based on the manufacturing credits that Ireland used in the 1980's. Essentially, they would provide a zero tax rate for these manufactured items.
Since these valued added industries essentially do not currently exist, the tax credits could be sold to skeptical legislators as costing the state nothing, and providing a new source for jobs.
(Of course, any development of our regional port system requires a road infrastructure on both sides of the River that more easily links the general economies of Baton Rouge and New Orleans, so that in a two household income, one member of the couple could work in this area, the other in BR with a reasonable commute time. More on that concept here.)
We must also match our clearest geophysical asset with our cultural economy to create real economic development. Much discussion has centered in recent years around making Louisiana "a retirement haven". National surveys place warm, year round weather, access to sporting diversions such as fishing and Golf, and entertainment resources as three of the top five justifications for finding a region in which to retire.
Louisiana has all three in abundance, yet most retirees, even those who originally hailed from the Metro New Orleans area, tend to move to Florida.
Why? Florida has no income tax.
If the state rid itself of the personal income tax for those over the age of 57, with our lower cost of living, we could compete for these wealthy retirees, many of whom had to leave the state for job opportunities years before.
The fiscal note if we passed this next year would be $800 million or less than a third of last year's surplus. But, realistically, the legislature will not likely pass such a large tax cut so quickly.
So, eliminate income taxes for anyone over the age of 57 who moves into Louisiana and has not lived in the state for five years. That costs the Treasury nothing. Then remove the income tax for all citizens over the age of 67. At a cost of less than $150 million, it is affordable. Then phase out the remaining taxes for Louisiana residents between 67 and 57 over the next decade.
Economically, we could compete with any existing retirement state, and the costs to the Treasury would not amount to more than $150 million per year. Increased purchases of homes and resources from the influx of retirees would cover that amount in sales taxes.
In other words, we need new and innovative ideas at the governmental as well as corporate level to take our assets and expand them into industries.
Yes, we need to remove the taxes on inventory and debt, machinery and equipment, but without new ideas we will not we able to even distinguish ourselves from our neighbors.
Only innovative perspectives can bring real change.
Where this can be seen most aptly is in the area of Crime. There will be no economic development without enough police on the streets to let the citizenry feel safe.
Post-Katrina, police departments have, like other critical services, seen tremendous attrition rates--and have had extreme difficulty in recruiting. To keep cops here, give them a house. The state will, thanks to the Road Home, own over an estimated 20,000 houses. Rather than waste them through a myriad of parish political deals, any police officer, fireman, first responder, teacher, or medical professional, who opts to live and work in Louisiana for seven years gets one of the Road Home houses for FREE--and a low interest loan to fix it up. In a study for the New Orleans Police Foundation, The Rand Corporation estimated that this plan would boost recruitment substantially.
Simply, we need new ideas or economic development in Jefferson Parish, and the recovery in Orleans, will be stillborn.
October 5, 2007 4:56 PM