In the aftermath of Hurricanes Katrina and Rita, George W. Bush approved a sweeping and lucrative package of developer-ended tax incentives. HR 4440, also known as the Gulf Opportunity Zone Act. President Bush spoke about the Go-Zone Act on the day he signed it into law in December 2005. He said:
Today, I’m going to sign the Gulf Opportunity Zone Act of 2005. It’s a step forward to fulfill this country’s commitment to help rebuild. It’s going to help small businesses, is what it’s going to do. For small businesses in the affected area, the GO Zone will double expensing for investments and new equipment from $100,000 to $200,000.
The bill also provides a 50 percent bonus depreciation, and that means tax relief for small businesses that — and businesses that purchase new equipment and build new structures. In other words, this tax act provides incentives for people to move forward. And as these businesses move forward, they’re going to need to employ people. So this is a tax bill that has got employment consequences to it. This is going to help the entrepreneurs of Louisiana and Mississippi and Alabama, entrepreneurship creates opportunity, which creates job.
This is just part of our plan to help the people get back to work. We’ve got to help workers get the skills they need. I just met with a group of concerned citizens from business and labor and education, all aspects of society. Again, I want to thank you all for being there. We’re talking about how to help put together a strategy that takes advantage of the jobs that are going to be created down there to make sure there’s a skill set match. We’ve got a lot of people that want to work, and yet they may not all be electricians or plumbers. And so one of the real challenges and opportunities we have is to match willing worker with jobs which will actually exist. And that’s what we’re talking about and strategizing about.
Most of us here in Louisiana assumed that the Go-Zone Act was intended to help redevelop portions of the State devastated by the hurricanes. Thousands of people lost their homes, and there was a documented and immediate need for new housing in the region. In Louisiana, the Gulf Opportunity Zone was designated for the following areas:
Of the 64 parishes in the State of Louisiana, 37 of them were eligible for at least “some” of the provisions of the Gulf Opportunity Zone Act. Although many of these parishes suffered direct and significant infrastructrual damage, others did not.
One of the best examples of a parish that did not endure the type of devastating damage that would warrant a federal act incentivizing development is Lafayette Parish. Yet a handful of Lafayette developers are taking full advantage of those incentives in order to build high-end apartment complexes and upper-middle class residential neighborhoods. Though these types of developments may be needed in Lafayette Parish, the incentivization of those developments under the guise of hurricane relief is questionable.
Another prime example of the potential misuse of Go-Zone incentives occurred in Alabama. Oyster linked to a fascinating article by First Draft about a Go-Zone development near the University of Alabama. The developer of these brand new condomiumns near Alabama football stadiums is taking advantage of Go-Zone incentives:
This may be nice and convenient for students and alumns of the University of Alabama, but it does not appear to address the intended audience for the Go-Zone Act– the people whose homes were destroyed by the hurricanes. One may argue, “But at least it creates jobs.” Well, so would other, more necessary developments.
When you review the Louisiana parishes included in the Go-Zone Act, you may wonder why Rapides Parish is excluded. After all, we received our fair share of damage after Rita and during both hurricanes, Alexandria was the principal dispatch location for disaster relief, yet Sabine, Evangeline, and Vernon Parishes are included in this Act. If anyone could shed light on our exclusion, please feel free.
Regardless, there is evidence that Go-Zone incentives are being unnecessarily utilized for developments that only benefit the wealthy, while cutting costs for wealthy developers, and this is a cause for concern as Louisiana continues to rebuild.
CenLamar 
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