Louisiana Introduces High Impact Job Program to Boost Wages

News Summary

Louisiana officials have rolled out the High Impact Job Program aimed at enhancing employee wages. This initiative, approved by the House Committee on Commerce, in collaboration with Rep. Julie Emerson, offers grants to companies providing salaries above local averages, encouraging better pay and attracting businesses to the state. With financial incentives linked to salary benchmarks, the program aims to improve economic conditions in distressed areas while integrating remote job opportunities for local residents.

Louisiana economic development officials have introduced a new program aimed at improving employee wages rather than merely increasing job numbers. The Louisiana House Committee on Commerce has approved House Bill 507, which establishes the Louisiana High Impact Job Program, introduced by Rep. Julie Emerson. The program is designed to attract companies that offer above-average salaries relative to local pay scales.

The key features of the program include grants that can cover a portion of the salaries paid to employees. Companies can qualify for grants of 18% for jobs that pay 125% of the average parish salary and 22% for jobs that pay 150% of the average salary. For employers situated in “distressed areas,” jobs paying at least 110% of the average will earn an 8% grant. There is no upper limit on the number of new jobs that a company can create to receive benefits, although state officials will retain the authority to modify program rules as necessary.

The Louisiana High Impact Job Program has established funding parameters, capping grants at $200,000 per job annually, with an overall limit of $125 million allocated for the entire program each year. Employers must also provide health insurance and ensure that new hires are full-time direct employees or work directly for a named subsidiary in the state contract. Importantly, the program allows for the inclusion of remote jobs for Louisiana residents in adherence to state tax law.

The funding for these grants will be sourced from state corporate income and franchise taxes; however, the franchise tax is set to be phased out by January 1, 2026. Legislative estimations suggest that the program will incur an average annual cost of approximately $69.4 million over the next five years. The Louisiana Economic Development Secretary has noted that the new program may overlap with the existing Quality Jobs program for several years.

The Quality Jobs program currently offers a 6% payroll rebate for ten years and includes investment incentives that are not available under the new High Impact Jobs program. Importantly, small local businesses will also have the opportunity to access the benefits of the new program as long as they meet the criteria of exceeding the parish average job pay. The Quality Jobs program will remain open for applications until its designated sunset date of June 30, 2025. Businesses already benefiting from the Quality Jobs program can choose to keep their existing contracts or transition to the new program, but are prohibited from receiving incentives from both simultaneously.

As of this year, 16 projects have submitted applications for Quality Jobs rebates and are expected to create over 1,500 direct jobs, with anticipated payroll reaching nearly $167 million once fully staffed. The High Impact Job Program takes inspiration from successful incentive programs previously established in states such as Georgia, North Carolina, and Texas.

However, some critics have raised concerns regarding the program’s capacity to enhance wage levels in Louisiana significantly. Recent data indicated that the average weekly wage in Louisiana was $1,195 in the first quarter of 2024, ranking the state 39th nationally and below the average for 47 of its 64 parishes.

The Louisiana Economic Development Office will determine which areas within the state qualify as “distressed,” with the aim of directing support towards businesses in these locations. In Donaldsonville, for instance, wages are noted to be substantially lower than the average for the parish, highlighting the need for targeted economic support to improve local financial conditions.

The introduction of this new program follows a broader push for tax reform led by Governor Jeff Landry, designed to lower corporate income tax rates. The phase-out of current incentive programs is situated within this legislative context, reflecting Louisiana’s ambition to improve its economic competitiveness and confront demographic challenges such as population decline.

Deeper Dive: News & Info About This Topic

• La Illuminator: Louisiana Incentive
• New Orleans Saints: Cam Jordan Foundation
• NOLA: Louisiana Film Industry Tax Breaks
• Wikipedia: Louisiana
• Encyclopedia Britannica: Louisiana