Sen. Allain: Jindal plan could cost SMP $5 million
A plan by Gov. Bobby Jindal to make all business inventory taxes nonrefundable by the state could mean as much as a $5 million reduction in revenues across the parish, according to Sen. Brett Allain.
Allain told the St. Mary Parish Council Wednesday that he intends to explore other solutions to balance the state budget that is facing a possible $1.6 billion deficit.
“It’s very hard to make all the numbers work particularly with the reduced revenues from oil and gas,” he said. “Just due to oil and gas, we’re a half-billion in the hole.”
The inventory tax refund was enacted by the state in 1991 in an effort to entice business, he said. Businesses are assessed the property taxes against inventories by local governments but are reimbursed 100 percent by the state. Allain said the cost to do so has grown from $63 million in 1991 to $450 million today.
Based on a study by the Louisiana Association of Business and Industry, killing the refund could result in businesses reducing their inventories by as much as 45 percent. That could also lead to fewer jobs, he said.
“If there’s less inventory here, you need less people to keep it,” he said. “It’s in the legislature’s hands. I was just coming here to brief you on how severe the problem is.”
The legislative session begins on April 13. “I know there’s going to be at least a dozen proposals just on inventory tax alone,” Allain said. “There ain’t but two ways to balance the budget — lower the spending or cut away some of the rebates or raise taxes. At the end of the day we’ve got to balance the budget, we can’t come home until we do.”
In other discussion, the council heard from Chief Administrative Officer Henry ‘Bo” LaGrange on the road district bond package on the March 28 ballot.
St. Mary Parish Road District 1 was created by ordinance in December.
The district encompasses the entire parish with the exclusion of the Morgan City city limits.
Voters in the remainder of the parish will be asked to approve the levy of just under 1 mill that would be dedicated to road improvements. The millage, though, would not be a new tax but would be shifted from the current 1.25 mills currently levied by the library district, LaGrange said.
The library has paid off some of its debt early, LaGrange said. “So we will only have to levy one-third of a mill or .33 mills,” to repay that debt.
He added that creation of the district, which has the same boundaries as the library district, will restrict usage of the millage for road improvements.
If approved by voters, revenue from the $6.5 million package would be shared with the Baldwin, Berwick, Franklin and Patterson governments.