[Clarification: According to Global Data Systems CEO Chuck Vincent, his company received state backing on 60 percent of a $2 million bank loan his company obtained for a project, which comes to $1.21 million; GDS did not receive a corporate tax credit as the New York Times database indicates. Also according to Vincent, Global Data Systems has since paid back the loan in full.]
An exhaustive New York Times examination of tax credits, rebates and other incentives state governments use to lure new businesses and to keep existing businesses from relocating elsewhere suggests that all incentives are not created equal and, further, that states often do not get a good return on their investment.
The story, accompanied by an interactive gallery, focuses on Texas, by far the most aggressive employer of corporate incentives at $19 billion per year. Indeed, private sector job growth in Texas has far outpaced the rest of the nation, but:
[T]he raw numbers mask a more complicated reality behind the flood of incentives, the examination shows, and raise questions about who benefits more, the businesses or the people of Texas.
Along with the huge job growth, the state has the third-highest proportion of hourly jobs paying at or below minimum wage. And despite its low level of unemployment, Texas has the 11th-highest poverty rate among states.
“While economic development is the mantra of most officials, there’s a question of when does economic development end and corporate welfare begin,” said Dale Craymer, the president of the Texas Taxpayers and Research Association, a group supported by business that favors incentives programs.
Compared to our neighbor to the west, Louisiana’s corporate incentives are miniscule — $1.79 billion per year — yet, relative to the rest of the nation and particularly to many other states with considerably larger populations, Louisiana’s largesse to corporations is considerable. The vast majority of incentives to companies offered by Louisiana are in the form of corporate income tax credits, rebates or reductions, followed by property tax abatements and personal income tax credits. The energy industry is the single largest beneficiary, followed by film and manufacturing.;
Yet within Louisiana the city with the sturdiest economy and best economic growth over the last couple of years, Lafayette, is home to some of the fewest corporations benefitting from state incentives. Way down the statewide list of companies that have taken advantage of incentives is the Schumacher Group, which the Times lists as having received $9 million in 2011 in cash grants, loans or loan guarantees and free services. Next on the list in Lafayette is $1.72 million for Samson Rope Technologies (industrial tax exemption, property tax abatement and corporate income tax credit in 2009), followed by Global Data Systems with $1.21 million (corporate tax credit in 2009).
To see the data for Louisiana, click here. To read the Times’ story, go here.
Frank’s Casing Crew, now doing business as Frank’s International, will make its final appearance on ABiz’s list of the Top 50 Privately Held Companies in Acadiana this year, and once again, it will likely be at the top with more than $1 billion in annual revenues. The 75-year-old company specializing in tubular fabrication and installation services to the oil and gas industry plans to go public this year.
The defeat, or rather highjacking of House Bill 420 in the final days of this year's Legislative Session, say Reps. Vincent Pierre and Terry Landry, is the result of the propaganda spread by one unidentified local media outlet and an unnamed former state Representative, but nothing to do with the original legislation's lack of checks, balances or details.
He’s a singer. A songwriter. A piano man. A family man. He’s even got his own Wikipedia entry. He’s David Egan. And he knows ancient secrets about the monolithic stones of Stonehenge that he’s not willing to share.