Big Biz Bob! Jindal, Corporate Tax Exemptions and Higher Education
In his widely noted post-election comments to Politico, Governor Bobby Jindal laid out a litany of things the Republican Party could not be if it wanted to regain success at the national level.
“We’ve got to make sure that we are not the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything,” Jindal told POLITICO in a 45-minute telephone interview. “We cannot be, we must not be, the party that simply protects the rich so they get to keep their toys.”
Good stuff. Well said. We just wish that he meant it.
A look at corporate tax policy in the Jindal era shows that Bobby Jindal is, in fact, the Big Business Republican Governor of Louisiana.
According to the 2011 Department of Revenue “Tax Exemption Budget” report, Louisiana exemptions on corporate income taxes cost the state $1.215 Billion in revenue during the Fiscal Year that ended on June 30, 2008. That was the final budget of Governor Kathleen Blanco’s administration.
During the next five years under Jindal’s watch, exemptions on corporate income taxes exploded. Here are the numbers listed by the end month of each fiscal year, based on the 2012 Department of Revenue “Tax Exemption Budget”:
- FY 06/09 Corporate Income Tax Exemptions: $1,296,329,738 (up $81,089,948)
- FY 06/10 Corporate Income Tax Exemptions: $1,314,871,880 (up $99,632,090)
- FY 06/11 Corporate Income Tax Exemptions: $1,459,098,421 (up $243,858,631)
- FY 06/12 Corporate Income Tax Exemptions: $1,488,145,000 (up $272,905,210*)
- FY 06/13 Corporate Income Tax Exemptions: $1,517,908,000 (up $302,668,210*)
* The numbers for the fiscal years ending in 2012 and 2013 are estimates made by the Department of Revenue; the increased amount of exemptions for those years are based on those estimated fiscal year numbers. The figures for the increased in the amount of the exempted taxes are based on the final Blanco year of tax exemptions.
Add it all up, and Louisiana corporate income tax exemptions during the five years of the Jindal era have increased by more than $1 Billion dollars (see graphic above). As the Department of Revenue points out in its Tax Exemption Budget reports, tax exemptions are tax expenditures just as surely as is any line-item in the state budget.
With that thought in mind, where is this generous state taxpayer spending on corporations coming from?
Tax Exemptions and Higher Education Cuts
Governor Jindal and his supporting cast are fond of saying that tough times are at the heart of the state’s budget woes. But, can that really be true when, as Department of Revenue and Louisiana Economic Development admit that the state of Louisiana is giving away $6.9 Billion every year in tax exemptions?
While tax exemptions have exploded during the Jindal years, that loss of revenue has led to cuts in the only parts of the state budget not constitutionally protected — primarily health care and higher education. Health care has gotten a lot of attention recently, but the higher education cuts make clear just how much Jindal’s policies here have been precisely the policies that he says Republicans must abandon in order to be successful; that is, his policies have favored big business at the expense of middle and working class families.
At the same time corporate income tax exemptions were exploding, a series of ‘budget shortfalls’ led Jindal and the Legislature to cut $615,291,008 in state support for higher education funding. Some of those cuts were covered by federal stimulus spending which, of course, Jindal would be loathe to admit since it came from a Democratic President and a Democratic Congress.
Paying for Corporate Welfare With Tuition Increases
But, about $390,000,000 of the money that offset the loss in state funding came by way of higher tuition and fees on students and their families.
Ah, but there’s TOPS to help offset those tuition increases, right? Right, but TOPS is funded out of the General Fund. Who is not paying taxes into the General Fund these days? In the Jindal era, corporations are paying a lot less in taxes than they were five years ago and that loss of revenue is — in higher education — being made up out of the pocketbooks of Louisiana middle and working class families.
The Governor is actually making good political sense with some of his comments about what Republicans need to do to become more popular in the rest of the country. It’s too bad for our state that his new rhetoric does not match up with his record over the past five years.
Jindal’s talk is cheap. But, the price middle and working class families are paying for his policies is steep.
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Originally published: Nov 30, 2012