What Works — And What Doesn’t — in the State’s Incentive Strategy

Louisiana spends heavily on economic incentives — more than $500 million in 2023 alone — in an effort to attract investment, revive communities, and stay competitive with neighboring states. Whether those incentives deliver real value often depends on a simple question: Do they change business decisions that wouldn’t have happened otherwise?

To understand which incentives pass that test, we examined perspectives from economic development leaders, business organizations, policy experts, and academics. The answers point toward a clear pattern: targeted, transparent, and performance-based incentives tend to generate the strongest returns, while broad or poorly structured programs often struggle to justify their cost.

What’s Working

Across the board, Louisiana’s most effective incentives share a common trait — they unlock investment that otherwise wouldn’t happen.

Historic Rehabilitation Tax CreditCatalyst for downtown revitalizationAs Greater New Orleans, Inc. CEO Michael Hecht notes, historic rehabilitation credits consistently pass the “but-for” test. Projects in New Orleans, Shreveport, Lake Charles, Alexandria, and small towns across the state simply would not have moved forward without them. These incentives create permanent value — new residents, new businesses, and new property tax bases.

LED FastStartNationally recognized workforce developmentBusiness leaders and economists agree: FastStart remains one of Louisiana’s most valuable tools. It’s targeted, customized, and directly tied to job creation. As Invest in Louisiana director Jan Moller points out, no incentive is more powerful than a skilled workforce, and FastStart is a tangible way the state delivers it.

Recent Tax Policy ReformsA long-awaited competitiveness boostLouisiana Economic Development Secretary Susan Bourgeois highlights one of the most encouraging developments: Louisiana’s jump from 29th to 10th nationally for corporate tax favorability following last year’s reforms. Incentives help close deals, but good tax policy attracts deals before they’re even on the table.

What’s Not Working

Programs that are too broad, too expensive, or insufficiently targeted often fail to deliver the results taxpayers expect.

Enterprise Zone ProgramToo small to change behaviorHecht describes the enterprise zone credit as a classic example of an incentive that doesn’t alter business decisions — meaning Louisiana pays for activity that would have happened anyway.

Industrial Tax Exemption Program (ITEP)A lightning rod for local concernsMoller points to ITEP’s long-running governance challenges: local authorities often have little direct say over property tax exemptions affecting their budgets. While reforms have improved the process, ITEP remains controversial in parishes seeking more input and accountability.

Motion Picture Investor Tax CreditHigh costs, low permanenceSeveral experts cite the film tax credit as one of Louisiana’s least effective incentives. While it brings short-term activity and cultural excitement, long-term job creation remains limited, and much of the benefit flows to out-of-state companies.

The Bottom Line

Louisiana’s best incentives — FastStart, targeted redevelopment credits, and tax reforms that simplify and strengthen the state’s overall climate — all share the same DNA: they reduce barriers and increase competitiveness where it matters most.

The least effective programs are those that either subsidize activity already on its way, or fail to produce durable economic gains for Louisiana workers and communities.

As the state continues modernizing its incentive portfolio, the priority should remain clear:Invest in tools that move the needle, strengthen our workforce, and make Louisiana the easiest place in the Gulf South to do business.