Greater Baton Rouge Business Report: Gov. Foster's sound track is stuck on business

While the meetings between Gov. Mike Foster and the business lobbyists are cordial, they are not exactly warm.

The governor sounds like a CD stuck by a piece of dust, repeating himself ad nauseum: why doesn't the business lobby, in particular the Louisiana Association of Business and Industry, make any positive contributions?

LABI wants to protect its members by doing away with corporate franchise income on debt on the theory that it will stimulate investment and create jobs. It's the old Republican trickle-clown, trickle-down, trickle-down theory of the economy. No problem there, really. That's what the business lobby is supposed to do.

But Foster wants to know why the lobby isn't stepping up to the plate to help in other ways, including making some positive suggestions as to how the state should attempt to diversify and build its economy, to help out in public education, university investment and all the other economic development issues that business helps government direct in other states.

The governor points to Shreveport, where a public-private partnership has not only made the northwest Louisiana city a gambling mecca but put it in the vanguard of biomedical research and biotech health care nationwide.

But there are no such public-private partnerships at the state level: the administration and the business lobby are locked in mortal combat, and. the potential is for neither to be the winner.

LABI was formed to create the Right-to-Work Law in 1976. Now, with the overlay of the North American Free Trade Agreement, Hispanic laborers from Mexico are working on such state construction projects as the LSU Law Center renovations. Our best electricians, plumbers and craftsmen are going to Florida, Georgia and northern Virginia for decent-paying jobs.

For Foster, the immediate problem is how to get the Legislature to hold back on business tax cuts while at the same time hanging on to the sales taxes on food and utilities.

That's a major problem, especially since the nature of those sales taxes is not generally known.

There is no sales tax on food and utilities to be imposed. The state's sales taxes exist already, but the law exempts food and utilities from those sales taxes. The Legislature has been voting to suspend those exemptions every two years, either in whole or in part, for the past 15 years or so.

The media simply says the Legislature must reimpose sales taxes on food and utilities because that is, after all, the effect on taxpayers. But it's a repeal of the suspension of the exemptions we're talking about here. That's a distinction Foster likes to make.

Not so LABI and the anti-tax crowd, who see it simply as a tax increase.

That is the impasse that exists in the State Capitol with four weeks before the June 15 constitutionally mandated end to this session.

Casino news break

The state's most popular casino is in deep danger of losing its license.

The state Gaming Control Board will investigate allegations of improprieties, deceptive reporting and misleading statements made by Jack Binion and other officials of Bossier City's Horseshoe Casino, consistently first in revenues among the state's riverboat casinos.

The board elected to hold a hearing on "substantial issues" raised by Louisiana state police investigators and special Assistant Attorney General Ray Lamonica in a report to the board.

Horseshoe has been operating under a conditional, temporary license renewal since 1999, when the board ordered the, investigation over concerns about Binion's involvement in the federal investigations of former Gov. Edwin Edwards and state Sen. Greg Tarver, D-Shreveport, whose childhood friend's family made some $19 million for basically nothing--or at least with no written contracts nor any visible work product.

The board has the option of declining to renew the license, renewing it with specific conditions, including payments of hefty penalties or renewing the license unconditionally.

But unconditional renewal seems unlikely. Binion left Illinois after gaming regulators there raised similar issues as were raised in Louisiana after Binion took the Fifth Amendment rather than testify before the federal grand jury that investigated Edwards.

A more likely scenario may follow the board's precedent set by its investigation into Players Casino Lake Charles on charges it failed to report contracts with friends of the Edwards family. Players Casino was allowed to pay a $10.8 million fine and sell out to Harrah's.

If the matter goes to a gaming board hearing--similar to a trial--it could be the next Louisiana gambling scandal.

John Hill, Capitol reporter, can be reached by mail at P. 0. Box 44337, Capitol Station, Baton Rouge, LA 70804.