House lawmakers on Thursday voted 59-38 for a bill that would change the public records law to allow the state economic development agency to hide certain corporate tax incentive records from the public.
House Bill 456, sponsored by Rep. Rick Edmonds (R-Baton Rouge), proposes to make an exception to Louisiana’s public records law for certain records under the Louisiana Economic Development (LED) tax incentive programs, including the Industrial Tax Exemption Program, Louisiana Quality Jobs Program and Louisiana Enterprise Zone Program.
“It is imperative, members, that we do not let this instrument go across to the other side (to the Senate),” Rep. Barry Ivey (R-Central) said during floor debate Thursday. He said HB 456 is one of the most problematic bills he has seen.
Under the state’s economic development programs, companies often enter into contracts with the state to receive millions of dollars in state tax incentives in exchange for a promise to create jobs. Those contracts often require that those jobs pay meaningful salaries. Under the Quality Jobs program alone, 123 companies received a total of $140 million in tax rebates during the 2018-2019 fiscal year. Current law allows the public to judge for themselves whether that $140 million was a good investment by allowing them to search LED’s records to find out how many jobs each company created and the hourly wages they paid employees.
Edmonds defended his bill as a necessary measure to shield sensitive employee data from identity theft. He said the tax incentive programs are an agreement between Louisiana Economic Development and a company but not the company’s employees; thus, their personal information should remain confidential.
No one has disagreed with Edmonds on that point. Instead, those who oppose the bill have said it goes further than concealing employees’ personal information. Additional language in Edmonds’ bill proposes to hide corporate-level data, including the salaries a company pays with the money gained from state tax rebates and other incentives.
If the wages that a company pays for each job is kept confidential, Ivey said on the House floor Thursday, it would be impossible for the public to know if the laws surrounding the tax incentive programs are being followed.
Edmonds responded, “I don’t believe that that type of public record is of any necessity whatsoever.”
Rep. Buddy Mincey (R-Denham Springs) said residents would lose transparency if the bill becomes law, and Rep. Robby Carter (D-Amite) called it an “anti-transparency” bill.
“This bill isn’t about protecting the little guy,” Ivey said. “It’s only about masking these issues for the big companies…This is what it’s about: $140 million given away to 123 companies…This bill would allow for no public accountability whatsoever. None. Zero.”
Edmonds said the bill would still allow a company’s total paid wages to remain public, but Ivey said that would be of little use. For instance, a company might say it created 100 jobs with salaries totaling $5 million. That might mean the company is paying a $50,000 salary for each position, or it could mean the company is paying a $1 million salary to a single executive officer while the other 99 employees are part-time or temp workers earning $10,000 a year. It would be impossible to know, Ivey said, without line items to correlate salaries with the number of hours worked.
“An individual wage should not have to be relevant to this issue,” Edmonds said, but he also said he is willing to negotiate with Ivey on the legislation.
Ivey said he hopes they can come to some agreement but said Edmonds would not budge during previous negotiations: “We don’t need the names, we don’t need the positions,” he said to the entire chamber. “I even discussed the possibility that if it’s less than 10 employees, hey, just give us the aggregated number and we’re good. But if it’s more than 10, then we should demand this information.”
Ivey introduced a floor amendment on Thursday to try to remove the “wages” language that would hide salaries. It received some bipartisan support, but it was ultimately rejected in a 40-54 vote.
“If we can’t require this one data point — wages, so we can tie it to hours — if we can’t require that on a program that we give $140 million, approximately 1.4% of the state general fund budget, on an incentive program — I don’t know what I’m doing here,” Ivey said. “I’m serious. I don’t know what I’m doing here…one little requirement…It is imperative, members, that we do not let this instrument go across to the other side.”
Edmonds said he supports transparency and believes Ivey opposes the legislation because he has a problem with ITEP and other tax incentive programs.
“This is about an individual that works for a company,” Edmonds said in defense of his bill. “This is not about a person that applies for any one of these exemptions.”
The bill ultimately passed and has been sent to the Senate for consideration.