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Legislative economist says Louisiana tax break programs are 'open-ended' spending for state

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BATON ROUGE, Louisiana — State officials need to consider Louisiana's long list of tax breaks as spending programs that siphon dollars away from the budget, just like road projects and health care services, the Legislature's chief economist said Monday.

But Greg Albrecht said the difference with Louisiana's $7 billion in various tax credits, rebates and exemptions is that the spending comes off the top, with no annual oversight from state lawmakers before the money goes out the door.

"It's open-ended and unappropriated. It's on auto-pilot. The programs, the parameters, the statutes that set them up, participation, payout. It's got no controls, no review, nothing," Albrecht told the Press Club of Baton Rouge.

Some of the tax breaks have expiration dates, but they routinely get renewed.

Albrecht has been trying to get decision-makers at the state Capitol to understand the financial implications of the tax credits, rebates and exemptions they've passed and continued over the years. His comments come as state lawmakers have openly wondered whether some of the tax breaks are too costly for the state to continue.

Proposals to dole out new tax breaks have gotten tougher scrutiny as the state has grappled with repeated budget shortfalls since 2008, but only modest tweaks have been made overall.

PHOTO: Greg Albrecht, the Louisiana Legislature's chief economist, holds up a book outlining the lengthy list of state tax breaks, on Monday, Dec. 15, 2014, in Baton Rouge, La. Albrecht says the billions of dollars in tax breaks should be considered state spending, because they take dollars away from the state budget. (AP Photo/Melinda Deslatte)
Greg Albrecht, the Louisiana Legislature's chief economist, holds up a book outlining the lengthy list of state tax breaks, on Monday, Dec. 15, 2014, in Baton Rouge, La. Albrecht says the billions of dollars in tax breaks should be considered state spending, because they take dollars away from the state budget. (AP Photo/Melinda Deslatte)

Attempts to rein in the programs run into criticism from the businesses or people who would be affected. They talk about the economic benefits of programs designed to attract certain businesses, incentivize certain behavior or help specific groups of people.

Albrecht said decisions on how to spend state dollars on items from education to social services comes after money for the tax breaks is carved out, noting that the terms don't change when the economy strengthens or weakens.

"It has no regard to the competing needs, programs, goals of government, none whatsoever. In effect, this spending is the priority of state government," he said.

Tax talk will be on the agenda again next year, in the upcoming fiscal legislative session that begins in April. But with 2015 an election year and Gov. Bobby Jindal opposed to any tax changes that raise additional revenue for state coffers, the chance of significant changes to the state's tax breaks seems unlikely.

Albrecht said he didn't expect sweeping adjustments to be made to tax break programs by lawmakers in the upcoming session.

Earlier this year, Jindal vetoed a measure that sought more oversight of the programs. The proposal by Sen. Jack Donahue, R-Mandeville, the Senate's budget chairman, would have required the state's income-forecasting panel to estimate how much the state spends on certain tax breaks and to account for the spending in the budget.

The bill passed with overwhelming support from lawmakers, but Jindal suggested it could effectively force a tax increase on businesses by limiting spending for the incentive programs.

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