Lt. Gov. Mitch Landrieu walked into the meeting of the House Ways and Means Committee flanked by an artist, a musician, a master chef and a bevy of economic development enthusiasts. An unlikely bunch to be cavorting around the State Capitol together, the group has one thing in common during the current legislative session -- a set of far-reaching tax breaks designed to address what Landrieu, a New Orleans Democrat, refers to as the "cultural economy."
The Louisiana Legislature has a spotty tradition with regard to arts and entertainment. One bright spot in recent years was the birth of tax credits for film and television, and the current outlook is brighter than ever -- thanks to recovery spending and high oil prices.
Landrieu's legislative package consists of three measures that are expected to pass, and possibly even be expanded. It includes a program with local oversight to create cultural product districts and rehabilitate historic structures, tax credits for a wide variety of artists to live and work in Louisiana, and incentives to encourage food research and culinary arts. In several ways, the cultural economy package mirrors what many in New Orleans have been striving for over the past decade or so, especially downtown.
The "cultural products district" outlined in House Bill 359 could overlap or supplement what is planned for downtown New Orleans. That bill, as well as the entire cultural economy package, is authored by Rep. Taylor Townsend, a Democrat from Natchitoches. If ultimately passed by lawmakers, local governments could designate such districts starting next year for the "purpose of revitalizing a community by creating a hub of cultural activity, including affordable artist housing and work space."
The state Board of Commerce and Industry could grant state and local sales and use tax exemptions to eligible businesses for works of art sold in the district. "This will allow local interests to expand beyond the typical downtown development district," says Angelle Davis, secretary of the Department of Culture, Recreation and Tourism.
The legislation also expands the amount of tax credits available for rehabilitating historic structures within cultural districts. Presently, the state has set aside roughly $1 million in credits to be used annually on historic buildings, but Townsend's bill would increase it to $10 million, meaning as many as 400 structures could receive assistance each year, compared to only 40 today. Davis says many areas of the state plan to focus the credits on blighted areas, while others will build upon previous successes.
The second measure in the cultural economy package, House Bill 495, would create income tax exclusions for artists' work. The first $50,000 would be excluded entirely, while the next $50,000 would receive a 50 percent break. The next $400,000 would be eligible for a 25 percent exclusion, and works exceeding $500,000 would get a 10 percent exclusion. The bill casts a wide net -- "artistic work" is defined as both contemporary and traditional in disciplines such as visual arts, craft, music, theater, dance, fashion design, literature and media.
Linda Dautreuil, curator of the Brunner Gallery in Covington, says the artist income exclusion would allow the state not only to sustain many of its artisans who need help at home, but also to put Louisiana in a position to cultivate new talent and compete on a global scale. "Immediately following the storms, many artists in south Louisiana started looking to relocate and realized that other states have these incentives, and they left," she says. "We are in danger of losing our cultural base, and this could help bring people back."
The final piece of the package is probably the most delectable, as it addresses state income tax credits for culinary arts and food-science infrastructure projects. Under House Bill 568, if the total base investment in such a project is more than $15,000 but less than $150,000, each investor would receive a tax credit of 10 percent. If it's more than $150,000 but less than $1 million, the credit jumps to 15 percent. For anything topping $1 million, the credit would be 20 percent.
Chef John Folse, who has been a Louisiana culinary mainstay for more than 25 years on radio and TV, called the incentive a "no-brainer," since part of the state's tourism appeal is directly related to food. Folse has built a $50 million food empire, bolstered largely by a massive food processing plant in Donaldsonville that employs 200 people making cheeses, meats and other manufactured foods. His company produces everything from chili for Disney World to a brown-sugar glaze for Friday's restaurants.
Next year he's planning an $8 million expansion and upwards of 100 new hires, and he says he would have used the incentives if they were available when he started planning some time ago. "Had tax credits been available to me, you can imagine where we would have been," Folse says. "I would have reinvested the money and designed a $9 million expansion and hired more Louisiana people."
Landrieu says it's easy to generate excitement over food and entertainment, but many people shy away from dumping millions into growing the nontraditional market sectors. He says he's trying to change that, and the Legislature appears to be heeding the call. "You have to do the same thing for the cultural economy, from a tax policy perspective, as we do for other industries to help them grow," Landrieu says. "We can no longer treat them differently."
Jeremy Alford can be reached at firstname.lastname@example.org.
- Louisiana chef John Folse says if the proposed tax incentives had been available some time ago, he would have added another $1 million to the $8 million expansion plans he has in the works for his Donaldsonville food processing plant Ñ and he would be able to hire more Louisiana employees.