American Press, Lake Charles, La., on delay on tax incentives sends bad message:

August 12

American Press, Lake Charles, La., on delay on tax incentives sends bad message:

Members of the state Joint Legislative Committee on the Budget exercised their prerogative Friday when they delayed approving tax credits for Sasol's planned multi-billion dollar gas-to-liquids in Calcasieu Parish.

The issue revolves around the return the state will receive from the tax breaks.

State Sen. Jack Donahue, R-Mandeville, said he didn't want to rubber-stamp a project without knowing the particulars of the tax incentive package.

Louisiana Economic Development Secretary Stephen Moret, who negotiated the deal, said the state is offering at least $257 million in incentives over a 10-year period. He said those numbers are fluid and could change depending on Sasol's performance.

According to an LSU study, the project is expected to result in 8,394 construction jobs, 1,272 direct jobs and $873.2 million in tax revenues over 15 years. That's a return of 226 percent over a 10-year period.

Who wouldn't want that return on investment?

The committee opted to fiddle, even when Moret testified the state was in no danger of coming out on the short end of the deal.

The committee wanted Moret to return in two weeks with updated figures, but Speaker of the House Chuck Kleckley, R-Lake Charles, wisely stepped in and said it should take up the matter this week.

This dickering by Donahue and cohorts sends a bad message. This just isn't a once-a-month project. Sasol will shell out between $16 billion and $21 billion for its gas-to-liquid and ethylene cracker units. That's the largest single private investment in the state's history.

Moret said the committee's delay sends a bad message.

Would Donahue be so persnickety if Sasol's project had picked his district to locate? If so, the next construction project in Mandeville likely would be a custom-made rail for Donahue's departure out of town.

If this committee's intent is to grill Moret, it should be asking about the motion picture tax credit which one audit reported cost the state $170 million in 2010.

Whether it's the stock market or private business, predictability remains a virtue, uncertainty a curse. While cooler heads insist approval of the tax credits will occur, this delay borders on grand-standing.

Members of the Joint Legislative Committee on the Committee would do well to remember this the next time they're inclined to drag their feet on a game-changing project in the state.

Online:

http://www.americanpress.com/

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