2016 Mid Year Report



2016 Mid Year Report

Fiscal Reform Road Shows

C100 completed a series of technical briefings from November to February throughout the state with partners PAR, CABL, Budget Project, Tax Foundation, Dr. Richardson, & Rep. Julie Stokes to message the principles of tax reform. These briefings were hosted by C100 members statewide in Lafayette, Lake Charles, Shreveport, Monroe, Ruston, New Orleans, Baton Rouge, and Houma, as well as the Natchitoches Chamber of Commerce


Tax Reform Alignment Project

The C100 staff concluded an “alignment” project with DaVinci Global Consulting to determine member knowledge on tax reform issues as a vehicle to communicate the findings of the Tax Foundation on how Louisiana could change the Louisiana tax code to encourage a more competitive economy.


Chairman named to Task Force

C100 Chair Tom Clark was named to the Task Force on Structural Changes in Budget & Tax Policy. Appointed by the Governor, representing the Committee of 100 as designated in the 2016 legislation Tom was one of 13 members charged with the responsibility of analyzing the available reports, including the C100 commissioned Tax Foundation analysis, to determine best solutions for Louisiana to reform our tax code and make structural changes in our budget culminating in a September 1, 2016 report to the Governor and legislature.


Early Childhood Business Roundtable

C100 Launched the Early Childhood Business Roundtable in partnership with the Children’s Policy Institute with 30 statewide business leaders, 10 of which are C100 members. Business leaders see early care and education as both a workforce productivity issue, as parents need reliable, affordable child care in order to work, and also as a workforce development issue, as children who attend high quality early learning programs are more likely to be successful in school and in the workforce of tomorrow. Louisiana Policy Institute for Children and the Committee of 100 for Economic Development have capitalized on this nationwide momentum by launching Louisiana's first Early Childhood Business Roundtable, comprised of business and industry leaders from across the state who seek to add their voices to promote early childhood care and education in Louisiana.

Members of this Roundtable have already stepped up to speak out about the need to prioritize investment in early care and education in Louisiana, and have reached out to policymakers during the 2016 legislative sessions. C100 Members of the Roundtable are George Cummings, Randy Ewing, Pres Kabacoff, Walter Leger, Charles Rice, Phillip Rozeman, Craig Spohn, Jacqui Vines, and Michael Olivier.


Cuba

C100 has been a “go to” on Cuba initiatives to assist the Louisiana Alliance for Cuba under the Engage Cuba nonprofit in Washington DC and assisted the LA Cuba group to produce a “Doing Business with Cuba” program in New Orleans June 22 attended by over 175. Dr. Eduardo Bencomo, president of Cuba's International Finance Bank for over two decades, was the keynote speaker. Also, C100 has assisted LED to coordinate the Governors fall visit to Cuba with Cuban authorities.


Washington, D.C. Briefing

The C100 2016 Washington DC Briefing held Jan. 20-21 was challenged with a significant snow event that created travel obstacles for many attendees. The 2016 program was highlighted with an address by Governor John Bel Edwards, our congressional luncheon, a national policy briefing conducted by a US Chamber executive, a Washington insiders view presented by former Louisiana congressmen/women and the Cheniere reception at the Smithsonian Institution’s National Museum of Natural History.


IEDC Leadership Conference

The International Economic Development Council (IEDC) Leadership Conference was held in New Orleans in January. Michael Olivier, CEcD, served on the host committee to plan and execute one of the best attended leadership conferences to date. As a Fellow Member and Honorary Life Member, Olivier helped develope the program and raised funds for the event.


Gulf States Initiative

Committee of 100 was an integral part in facilitating the third Gulf States Initiative meeting between the Mexican States and the US States which border on the Gulf of Mexico. This meeting was held in Lafayette, April 20-21. The 2017 Gulf States Initiative meeting will be held in Campeche, Mexico, January 24-26.


Around the State with C100

CEO, Michael Olivier, engaged in speaking engagements, organizational meetings and educational opportunities for the promotion of economic development around the state. One notable engagement was that of the University of New Orleans’ Economic Outlook and Real Estate Forecast meeting, in which he was a guest speaker. He presented at the LSU/LIDEA Perspectives on Economic Development-Basic Economic Development Course. Along with various public speaking engagements, Olivier currently serves on several boards including the WTC New Orleans Board, WTC International Business Council Chair, and the Louisiana Business Technology Center-LSU Board and is the Immediate Past Chair on the Louisiana Industrial Development Executives Association Board. Olivier also serves on the Accreditation Committee for the International Economic Development Council.


A Letter from Our Chairman

Dear C100 Members:

As we enter the dog days of summer, I am pleased to ask you to mark your calendars for November 16, 2016 for our Annual Meeting. This year, Governor John Bel Edwards has graciously agreed to host our reception at the Governor’s Mansion, which will immediately follow our business meeting that will be held in the new location of the Louisiana Office of Economic Development in the LaSalle Building at 3:00.

As I enter the home stretch of my two year term, I am happy to report that C100 continues to improve on the successes of our past and is recognized as the leading statewide economic development organization. With the leadership of Mike Olivier and the support of our membership general and your executive committee, C100 continues to be a leading voice in comprehensive fiscal reform and broad based economic development, from early childhood to workforce development to post-secondary education.

Over the past six months, C100 has focused its efforts in supporting the foundational efforts of fiscal reform measures that will facilitate comprehensive fiscal reform during the 2017 Legislative Session and beyond. As your Chair, I’ve enjoyed the opportunity to lead our organization in this fiscal reform movement and am currently serving on the Task Force on Structural Changes in Budget & Tax Policy as Governor John Bel Edwards nominee. The Task Force is actively working to meet the September 1 deadline for our recommendations and it is hoped that this will serve as the template for a legislative agenda that will provide stability and security for our State, while maintaining an economically competitive business environment. Our efforts in 2016 to develop and publish “Louisiana Fiscal Reform: A Framework for the Future” with the Tax Foundation have repeatedly recognized and utilized by legislators, the current administration and the Task Force as a guideline for developing legislation and sound fiscal policy. C100 will be fully engaged in this endeavor throughout the next year with the support and encouragement of our membership, as we all recognize we must change the way we operate so that Louisiana can overcome the obstacles that are hindering our success.

With a refreshed Cooperative Endeavor with Louisiana Economic Development, C100 is poised to augment LED’s efforts with our private sector resources and member engagement. Most recently, we have assisted LED in facilitating engagement with Mexico, Cuba, the French West Indies and France for those members interested in pursuing domestic and international opportunities in these markets.

2016 has been an exciting time to be a C100 member. Our membership remains strong, our finances are solid and our leadership is progressive. If you want to become more actively involved, please let Mike or me know as opportunities constantly arise.

I look forward to seeing you all at our annual meeting November 16th here in Baton Rouge

Respectfully

Tom Clark, Chairman


Legislative Wrap Up-2016

The legislature has raised about $1.5B since the start of the year, some of it through permanent policy changes and some through a patchwork of bills that will sunset in the middle of 2018.

The Louisiana Legislature concluded its third consecutive Session on June 23, with the Second Special Session largely focused on closing a $600M budget gap for Fiscal Year 2016-17 that starts July 1. A handful of revenue raising measures passed totaling $284M.

All Bills Passed and Signed into Law:

HB35 ANDERS Signed by the Governor ­ Act 1: TAX/INSURANCE PREMIUM: Establishes the annual tax on health maintenance organizations (+$168,300,000 Revenue)

HB47 BROADWATER Signed by the Governor ­ Act 2: TAX/CORP INCOME: Provides with respect to the net operating loss deduction for corporate income tax (NO IMPACT Revenue)

HB27 BROADWATER Signed by the Governor ­ Act 3: TAX/SALES & USE: Provides for the taxability of sales or use of raw materials purchased for further processing (INCREASE Revenue)

SB6 MORRELL Signed by the Governor ­ Act 4; TAX/AD VALOREM: Provides for the carry forward rather than the refund of a certain portion of the tax credit for ad valorem taxes paid on inventory. (+$17,300,000 Revenue)

SB10 WARD Signed by the Governor ­ Act 5; TAX/AD VALOREM: Provides for the confidentiality of tax records, the definition of manufacturer for purposes of the tax credits for ad valorem taxes paid to local governments, and certain limitations. (+$57,000,000 Revenue)

SB15 MORRELL Signed by the Governor ­ Act 6; TAX EXEMPTIONS: Provides for an annual reporting requirement by certain nonprofit entities for certain sales tax exemptions.

HB24 ANDERS Signed by the Governor ­ Act 7; TAX/INSURANCE PREMIUM: Provides relative to the insurance premium tax credit (­$1,300,000 Revenue)

HB20 REYNOLDS Signed by the Governor ­ Act 8; TAX/CORP INCOME: Provides relative to the apportionment ratio for purposes of computing corporate income tax and provides for the sourcing of sales (INCREASE Revenue)

HB25 LYONS Signed by the Governor ­ Act 9; TAX/INCOME­CREDIT: Reduces the amount of the income tax credit for the Louisiana Citizens Property Insurance Corporation Assessment and makes the reduction permanent (+$17,000,000)

HB29 PRICE Signed by the Governor ­ Act 10; REVENUE DEPARTMENT: Provides relative to the calculation of interest on certain overpayments (+$16,300,000 Revenue)

HB50 MONTOUCET Signed by the Governor ­ Act 11; TAX/INCOME TAX: Reduces the individual income tax deduction for net capital gains (INCREASE Revenue)

HB51 JIM MORRIS Signed by the Governor ­ Act 12; TAX/SALES­USE, STATE: Provides with respect to the effectiveness of certain exclusions and exemptions from state sales and use taxes (DECREASE Revenue)

HB53 ABRAMSON Signed by the Governor ­ Act 13; TAX: Provides with respect to sales of certain services and tangible personal property at certain publicly owned facilities

HB69 HENRY Signed by the Governor ­ Act 14; APPROPRIATIONS/SUPPLEML: Makes supplemental appropriations for Fiscal Year 2016­2017.

Supplemental Appropriations (HB69):

TOPS $67.9M (Brings total funding to 70%)

Higher education $59.6M

K-12 outside of MFP $20M

Non-public schools $6.7M

Voucher program $4M

Public-private partner hospitals $50.5M

DHH $42.64M

DCFS $9.6M

Judiciary $7.6M

Corrections $5M

Local housing of state offenders $7.7M

Immediate Revenue Raising Measures FY16-17:

HB 20 Changes the method for calculating corporate income tax

(revenue increase)

HB 25 Reduces the income tax credit for the Citizens Property Insurance

Corporation Assessment ($17M)

HB 29 Limits the amount of interest people and businesses get back if they

overpay their taxes ($16.7M)

HB 35 Increases the annual tax on HMOs to 5.5% ($187M)

HB 50 Reduces the individual income tax deduction for net capital gains

(revenue increase)

SB 6 Limits the refund of the tax credit for ad valorem taxes paid on

certain inventory ($17.3M)

SB 10 Limits the inventory tax credit given to businesses that also get an exemption from paying local property taxes ($57M)