Governor wants BP to pay for lost tax collections

By Bobby Harrison/NEMS Daily Journal

JACKSON – Gov. Haley Barbour said Friday that he expects BP to reimburse the state as well as local governments along the Gulf Coast for tax revenue lost because of the oil spill.
On Friday, Barbour held a news conference from his Sillers Building office with Washington attorney Ken Feinberg, who has been tapped by President Barack Obama and BP to oversee the claims process.
BP has committed to pay claims to people who have suffered injury, whether economic, physical or otherwise, due to the April 20 explosion of the Deepwater Horizon oil rig which caused the leak in the Gulf of Mexico. The company has agreed to set aside $20 billion in escrow to pay those claims.
At the news conference, Barbour said, “Our position is that BP will be required to pay lost tax revenue as well.”
Barbour said the amount of tax revenue BP would be responsible for paying would be based on what the company pays to individuals.
For instance, if a hotel owner is awarded a claim for $1 million in lost revenue because of a decline in business associated with the oil spill, BP will be responsible for paying the state and local governments the tax revenue that would have been collected if the hotel owner had not lost the $1 million in business.
Barbour and Feinberg stressed that the names of people receiving payments from BP will not be made public. But the state will be provided statistics on the amount of claims paid to people for loss of income related to the spill.
That could be a payment to a fisherman or to a restaurant owner, for instance. The governor said the state and local governments also should be reimbursed by BP for the taxes they would have collected on the lost income.
The drop in Coast tourism will hurt state revenue collections, which already have been at historically low levels because of the recession.
Feinberg said BP already has paid out $60 million in claims along the Gulf Coast, including $10 million in Mississippi.
In addition, the governor said BP has paid $50 million to the state and local governments in Mississippi for cleanup costs and other expenses related to the leak and another $15 million for tourism advertising.