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Nungesser idea viable way to reform LA film credits

Is Lt. Gov. Billy Nungesser on to a good idea concerning the Motion Picture Investor Tax Credit that can both keep the film industry shooting prodigiously in Louisiana and as a result not have the state lose money hand over fist?

Nungesser, whose portfolio includes culture and tourism although the state’s Department of Economic Development oversees the credit, proposed to a reporter a profit-sharing arrangement for Louisiana not unlike that enjoyed by participants in movie productions. Typically, parties involved negotiate for a share of the net profits of a production. Nungesser suggests for blockbusters that the state get a cut of that action, liking it to oil wells where one strike can pay for lots of dry holes.

That could offset the huge taxpayer losses suffered on the program, which returns less than a quarter of every dollar spent to the state. At the same time, it could present a way to reverse the recent pullback of productions in Louisiana, as a consequence of reforms to the credit that eliminated its virtual open-ended status.


Time for Port of Caddo-Bossier to stand on its own

Various propositions merit Caddo and Bossier Parish voters’ attention on Apr. 9, with most deserving approval. But in one case, the time has come to cut the apron strings.

In Caddo Parish, voters must judge three property tax renewals of the Caddo parish School District. They service ongoing concerns and do not constitute new construction or hiring. A surcharge for Fire District #4 and in Bossier Parish a property tax for Benton Fire District #4 also appear.

Voters in both will consider the renewal of the 2.5 mill tax paid by property owners in the parishes. First imposed in 1994, it actually does not terminate through 2018, so the renewal would come nearly two years prior to the tax’s extinguishment.


Electoral politics intrude on PSC decision-making

A recent important decision by Louisiana’s Public Service Commission gave one of its number running for a higher office the chance to take the ordinary and grandstand to leverage it in a way to assist in his chances for this election.

CLECO, the state’s third-largest power utility, received permission from the PSC to be acquired by a consortium of mainly foreign pension investors. The consortium will pay a 15 percent premium to the equity’s price on Oct. 17, 2014, the day of the initial announcement of the deal. The original offer also promised minimal changes to management and none to staffing levels or to employees’ compensation, an increased Louisiana representation including customers on its board, no rate hikes, and a contribution to economic development funding. Shareholders overwhelmingly approved the deal over a year ago.

But wary of the PSC – it had forced rate reductions on the company prior to the deal that resulted in reduced earnings afterwards – the investors also came up with additional concessions, including a credit of $125 million credit over 15 years to customers. CLECO’s rates exceed typical statewide rates by around 20 percent, because of its smaller and relatively rural base that drives up costs.


Real world market proves tough on LA filmmakers

Let’s pull out the handkerchiefs and tune up the violins for the film and television industry in Louisiana as it learns that life in the real world sux.

A fat and happy industry through 2014 had separated a net over $1 billion from taxpayers’ earnings since the Motion Picture Investor Tax Credit had come into law in 2002, with a net negative return on investment for the state of anywhere from 435 to 769 percent in that time period. Oddly, policy-makers did not consider this a problem (and some, like current Commissioner of Administration Jay Dardenne saw it as beneficial) until dire (and subsequently correct) warnings of severe budgetary strains prompted them to place, among other things, a moratorium on buybacks for this fiscal year and cap redemptions at $180 million annually for the fiscal years 2016-18. The state otherwise buys back the credits for 85 percent of value (they also trade among interested parties) and previously had no limits on the amount the state would pay out on a yearly basis.

With an estimate of several hundred million bucks worth of credits out there, analysts thought the moratorium would prevent a rush on buybacks that act as a subset of redemptions, squeezing out any new projects. During the year, some of the surplus could deflate, leaving some room to resume buybacks starting in FY 2017.