Dec 11, 2012 11:14 AM by AP
BATON ROUGE, La. (AP) - Economic Development Secretary Stephen Moret said he'll propose changes to a tax credit program that was designed to spur development in depressed communities, but that has instead often benefited big companies investing in affluent areas.
Moret told a legislative committee Monday that Louisiana granted $91 million in "enterprise zone" tax credits in the budget year that ended June 30, 2011.
The Advocate reports that the credit's top applicants included Walgreen's, Rouse's Enterprises, Raising Cane's, Wal-Mart and a company with Shell service stations.
House Speaker Chuck Kleckley, R-Lake Charles, said the chains probably would have located in Louisiana communities without the tax break. He said he's concerned about subsidizing "big box retailers" in small communities that he claimed are squeezing out small, family-owned businesses.
"I think it's something that we need to look at. I think it's something we need to be concerned about, and maybe it's something that needs to be refined a little bit," Kleckely said.
Moret replied, "We're looking at a number of options in terms of potential tweaks to the program."
The issue came up during a meeting of the Revenue Study Commission, which is reviewing Louisiana's state tax breaks. Changes to the enterprise zone tax credit would need legislative approval.
Mark Atwood with Atwood's Bakery in Alexandria defended the program, submitting a letter that says the program has also benefited small businesses. He said the tax credit helped him expand from 4,800 square feet to 10,500 square feet and from 10 employees to 28 employees.
"We may not be adding hundreds of jobs, but the jobs we add are solid ones," Atwood wrote.
The enterprise zone tax credit provides a $2,500 per job tax credit plus either a sales and use tax rebate or a 1.5 percent investment tax credit.
Moret said the tax break program is much broader in Louisiana than in other states because, among other things, it does not require that businesses locate in an economically disadvantaged zone.
The credit was supposed to help poor communities in Louisiana by encouraging hiring. However, the Legislature later changed the program's rules.
12 hours ago