BATON ROUGE, La. - The Louisiana legislative auditor released a report Monday that found the state has missed out on $5.4 billion in tax revenue since 2006, all because of the state's tax credits and rebates.
However, economic developers say that's only part of the picture.
Louisiana's film tax credit program made it Hollywood South, but the high cost to state coffers is putting it and other tax breaks in the public eye.
From the film production tax credits to tax credits for sugarcane transport, half of the state's 88 tax credit programs cost $5.4 billion in uncollected tax revenue from 2006 to 2011, according to a new report by the legislative auditor.
'This is serious money and I think it's important for all of us in our legislature to understand that we do have these credits and we do have these rebates out there,' said Daryl Purpura, the state legislative auditor.
Economic developers, like GNO, Inc., say it makes sense to study and refine the state's tax incentives.
'That's the real problem with this report. It talks about what we've given away. It doesn't talk about what we've taken in. It only talks about the cost, not the benefit,' said Michael Hecht, CEO of GNO, Inc.
But it's not just the film tax program in question. The legislative auditor found the business inventory tax credit cost the state $1.5 billion. Insurance companies got $1.1 billion in tax credits for premiums paid to the department of insurance, and the film industry tax credits cost the state $512 million.
'The inventory tax credit, $1.5 billion, is really just a fix for the fact that we have not yet been able to get rid of a perverse tax,' Hecht said.
And without a requirement that the tax credit programs track the return on the investments, the legislative auditor said it's tough to tell if they're worth it.
We asked Mayor Mitch Landrieu's administration whether the film tax credit program is providing a tangible benefit to the New Orleans economy.
His adviser on the Cultural Economy said in a statement, 'The state's tax incentive program for film has helped New Orleans grow a new industry. We estimate that since 2007, New Orleans has seen more than $2 billion in direct spending from tax credit film projects money that is spent in and remains in the local economy, as the program intended. Our local film industry is now nationally known, and it supports more than 1,000 full-and part-time jobs. Production companies want to film here because of the tax incentives and numerous related businesses have launched or relocated to New Orleans because of the opportunities that have been created.'