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Bribery masks, does not change, LA disincentives

What all is this fascination that Louisiana state policy-makers have with bribing people to find employment in the state? We already have Gov. Bobby Jindal and pay-challenged Secretary of Economic Development Stephen Moret stumping to dump over $300 million in a fund to hand over to businesses which relocate into the state. Now we have a proposal to hand others taxpayer dollars – their own, it seems – to stick around or to return to take jobs for at least five years.

HB 1156 by state Rep. Neil Abramson would allow those who graduate from high school in Louisiana (regardless of where they went to college) who get a college degree to divert any state income taxes from employment in state they would pay for five years into an account that could be used for a down payment on a house bought within three years after the five-year period ended. But leave the state before the time is up or don’t buy the house within the time frame, and the money goes into the state’s treasury.

The bill, of course, will do little positive. Louisianans who fit the bill would be reluctant to enter into the program because it so limits their options. What if they find a position out of state with a raise more than sufficient to offset the forgone escrowed taxes within the five years? What if they want to buy a house in order to build equity much sooner? And what if the kinds of jobs appropriate for this level of education don’t exist?

But it’s the entire philosophy behind the bill that is the most objectionable. Like the business megafund idea (or at least its funding at the proposed exaggerated level), it treats symptoms but allows the disease to continue by dangling incentives to compensate for the state’s disincentives, rather than working on eliminating the disincentives themselves.

The disincentives stem from a state fiscal structure that penalizes investment and rewards inferior policy-making agendas. Or, put another way, Louisiana individuals and businesses are overtaxed and their tax dollars are not always wisely spent. To its credit, the Jindal Administration has started working on the latter, and it’s hoped that with things like moving the proposed addition to the megafund instead into a position where it can be used to offer tax relief in future years it will soon get going on the former.

In the interim, this bill may be disregarded as something which will not address the basic problem haunting the state. As Edmund Burke remarked, “To make us love our country, our country ought to be lovely;” Louisiana will begin its turnaround when people, jobs, and investment are attracted by its loveliness, meaning bribery no longer must be used to make it look lovely because it will have become lovely.

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