The emergency special session the legislature called supposedly to deal with governing and budgetary issues emanating from the COVID pandemic has taken a not-very-surprising turn.
House Bill 29, filed by Rep. Phillip DeVillier, R-Eunice, which would suspend a 12.5% severance tax that oil and gas companies pay on crude fossil fuels extracted from newly-drilled wells or enhanced wells, passed after a floor debate with a 68-22 vote.
The bill, requested by the Louisiana Mid-Continent’s Oil and Gas Association, is estimated to cost taxpayers $157 million over the next five years, according to the legislature’s fiscal office. It allows companies to claim credits on each well for up to 24 months or until the company recovers the amount it spent to drill or enhance the well, whichever comes first.
Unlike other tax breaks such as those under the Industrial Tax Exemption Program, DeVillier’s proposed tax suspension carries no job-creation or residency requirements or investment thresholds in order for a company to qualify. Companies can also claim it in addition to other breaks such as those under ITEP as well as a separate tax credit being proposed in House Bill 78, which would allow local governing bodies such as school boards and sheriffs to accept a lump sum of no more than two years of property taxes from a company and exempt them from taxes for the next nine years. That bill is slated to be considered before the full House on Oct. 12.
Sure. That ought to fix it. I remember way back when they would at least go through the motions of caring about keeping the budget afloat by kicking the can ahead to a series of "fiscal cliffs" that would have to be narrowly averted. Now that we're living in the end times, everyone is content to just leap right off the ledge straight away.
Also in this package, a "sales tax holiday" because why not. But since we are already busted, why stop there? Probably there is public money to throw at some private schools in a way we haven't thought of yet.
The final tax bill considered Tuesday was House Bill 20, authored by Rep. Rick Edmonds, R-Baton Rouge. It offers a state income tax credit to residents with certain narrowly-defined education expenses related to the COVID-19 pandemic.
“I know we’ve done a lot to help businesses, so I just wanted to give something to the people,” Edmonds said.
The bill offers a credit on “educational coaching services for an in-person facilitator of virtual education delivered by a public or approved nonpublic elementary or secondary school.” The bill would help parents defray the costs of an in-person tutor who assisted with virtual courses for college students. It would only apply if the student being tutored is a qualified dependent and is at least 18 or a high school graduate.
Not sure what they'll do next year when they have to fix this mess. But I'm willing to bet it will involve still more tax cuts for oil companies.
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