Louisiana pays Pelicans millions in discounts to hire NBA players

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The New Orleans Pelicans receive a Louisiana $ 3.65 million cash back annually, more than any other company, by counting the positions of its professional basketball players as newly created direct jobs in as part of the state’s quality jobs program, an economic incentive intended to encourage businesses. create full-time, well-paying jobs for residents.

In 2020, the Pelicans said they had created a total of 183 jobs with an average wage of $ 608 an hour, according to documents from the Louisiana Economic Development Agency received as part of a request for public documents. The salary rate is so high because it includes the salaries of NBA players in the average salary of the Pelicans.

The basketball franchise is an outlier among companies receiving discounts on quality jobs from the state. The company that pays the second highest hourly wage is Brown & Root Industrial Services with a rate of $ 68 per hour.

The Louisiana Legislature established the Quality jobs program in 1995 to attract business. Under this program, the state grants between 4% and 6% annual payroll rebate based on the total wages of newly created jobs. Jobs must pay a salary of at least $ 18 per hour to qualify for the 4% discount and at least $ 21 per hour to qualify for the 6% discount.

Paying a higher average salary results in a larger refund for companies participating in the program, which is why the Pelicans’ tax break is so generous. Most other businesses in Louisiana don’t have multiple employees who earn millions of dollars in a single year.

Louisiana’s only NBA franchise, owned by Gayle Benson, Louisiana’s richest resident, has received between $ 2.8 million and $ 3.65 million in annual payroll rebates since 2004, when the team was called the Hornets.

For their part, the Pelicans simply took advantage of a state opportunity offered to the team years ago.

Normally, the Quality Jobs Incentive is only available to companies in certain industries or companies that primarily do out-of-state sales. Eligible industries include biosciences, manufacturing, software, clean energy technologies, food technology, advanced materials, multi-state corporate headquarters, aircraft MROs (maintenance, repair and overhaul) or oil and gas services.

As an NBA franchise, the Pelicans don’t fit any of these industry descriptions. Still, the state offered the Quality Jobs incentive during its negotiations to bring the team to Louisiana in 2002. Pelicans spokesman Greg Bensel said the state included the 5% reduction on the salaries of the Quality Jobs program as a provision in its rental agreement with the team.

The Louisiana legislature has changed the program several times over the years. In 2002, the same year the state was trying to lure the basketball franchise to New Orleans, lawmakers passed a bill that allowed the team to qualify for the program.

“When the Hornets were looking to move to New Orleans, one of the incentives that were offered to them by the state was this program,” Bensel said. “As part of their agreement to settle in Louisiana, the Hornets have been approved by the state to participate in this program. “

But the team’s involvement has led some lawmakers to question the program’s return on investment. Read the full story of Louisiana illuminator.


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