American Oil and Gas Reporter - April 2017 - 118

ConventionCoverage: Louisiana Oil & Gas Association

Pausing after LOGA's state legislative forum are, from left, Representative Neil Abramson,
D-New Orleans, Representative Cameron Henry, R-Metarie, Senator Sharon Hewitt, RSlidell, and LOGA Vice President Gifford Briggs. During the forum, the lawmakers often emphasized that Louisiana's ﬁscal problems called for an overhaul and not mere tinkering.

Senator Sharon Hewitt, R-Slidell, a
member of the Senate Finance Committee,
compared Louisiana with other Southern
states. Average per capita spending for
other states in the region is $8,725, she
said, with Georgia occupying the low
end of that spectrum at $7,805. Louisiana,
she contrasted, spends $10,156 a person.
"We are absolutely not a lean, mean machine," she characterized. "There are inefficiencies and tremendous opportunities
to save money. Don't buy what you hear
from the governor that we already have
cut everything we can and the only answer
is to raise taxes."
House Ways and Means Chairman
Neil Abramson, D-New Orleans, suggested
part of Louisiana's problem originated
in the state taking excessive responsibility
for funding local functions while handcuffing local authorities' options to raise
those funds themselves. Ultimately, he
suggested, the best way to address the
convoluted structure is with the kind of
overhaul that can be achieved through a
state constitutional convention.
"The biggest impediment to that has
been everyone with a constitutionallydedicated fund or protection," he advised.
"They would rather protect themselves
than fix the system."
Finding Funds
Louisiana is said to face a $617 million
shortfall, Henry related, but actual cuts
amount to only $97 million, he related,
while the rest of the gap is attributable to
agency wish lists. "The remainder has to

be made up in the near future, and we do
not anticipate revenues to offset it, so obviously, significant reductions are going
to be made," he stated.
He emphasized that the same concept
applied to the next fiscal year, for which
the commonly mentioned shortfall figure
was $400 million. "That is based on what
agencies want," Henry explained. "We
are not going to get $400 million less
than last year. Even with the cuts, state
spending increased 7.8 percent. Agencies
are not receiving less money, they simply
are getting less than they want."
Nevertheless, Abramson predicted, the
2017 Louisiana Legislature will spend a
lot of time looking at ways to raise
revenue. "The administration is going to
try to make up some of that through
taxes or removing tax credits, exemptions
and deductions," he described.
A report by Governor John Bel Edwards' task force on structural change
primarily focuses on increasing personal
income taxes, Abramson continued. "Two
packages are being proposed, one of which
would increase revenue by $300 million.
The other would increase revenue by $700
million," he detailed. "Those were proposed
in the first special session last year and
never made it out of the House."
According to Abramson, lawmakers
are especially concerned by analyses
showing that people earning between
$40,000 and $200,000 a year will bear
the brunt in both scenarios. "It is upward
of a one-third increase in personal income
taxes for them," he described.

118 THE AMERICAN OIL & GAS REPORTER

Hewitt emphasized the extent to which
a healthy oil and gas industry would fill
Louisiana's coffers. She urged people to
look beyond the 5 percent the state collected in mineral revenue, and pointed to
the broader economy. "A barber in Central
Louisiana told me his business was down
60 percent," she recounted. "He had no
idea so many of his customers used to be
employed in the oil and gas industry.
Those dollars roll through the economy
and really drive the state's budget."
She cited figures from the state economist showing that $200 million of
Louisiana's shortfall was attributable to
a drop in personal income tax receipts.
"That is a direct result of the oil and gas
industry losing 18,000 jobs in the last
two years," Hewitt surmised. "It is no
big secret: If you want to fix the state
budget, get the oil and gas industry back
to work. You cannot sue the industry and
try to shake it down; you do not overregulate it, but simply do what is necessary
to help protect safety and the environment,
and put the industry back to work."
Regulatory Panel
The LOGA convention's annual state
agency panel featured:
* Commissioner Richard Ieyoub from
the Louisiana Department of Natural Resources' Office of Conservation;
* Secretary Chuck Brown with the
Louisiana Department of Environmental
Quality;
* DNR Secretary Tom Harris; and
* Johnny Bradberry, the governor's
executive assistant for coastal activities.
Harris addressed what he termed "the
elephant in the room" with regard to the
state's decision to intervene in lawsuits
about Louisiana's diminishing coastline
that five coastal parishes have filed against
various oil and gas companies.
"Our involvement with these lawsuits
is not a condemnation of the industry as
a whole, any more than citing violations
or issuing fines in individual cases would
be," Harris maintained. "It simply is an
attempt to ensure that violations of our
coastal rules are pursued, and that operators
that may have been in violation are held
accountable."
Such accountability not only is a regulator's job, he held, but also helps ensure
the companies that do not cut corners face
no competitive disadvantage. "The overwhelming majority of operators in this state
try every day to do it the right way, but we
all know not every company does," Harris
described. "Part of making the playing field

American Oil and Gas Reporter - April 2017

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