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      Blanco: Yes, I expect we will probably need to do such a thing. I used to have a point of view that maybe we should move away from one or another tax and focus on a limited number of taxes. But now, I think that the best system is to have a combination of taxes, because if you're sales tax heavy and your economy goes south, you lose your tax base. If you're property tax heavy, the taxes can get so high that it begins to hurt families. You need a modest income tax, but the ideal is to have a balanced approach. Certainly Louisiana does need to have a little more equity in its tax system.
      That's one of the reasons why I went forward in the very first special session, early in my administration, to push forward the phase-out of two business taxes that Louisiana was imposing -- the corporate franchise tax on debt, which very few states apply, and the machinery and equipment sales tax, which many states do not apply. One reason is that other states don't impose these particular taxes -- they may impose some that we don't -- but our competitors were using them against us. And after seven years, this will have phased out $1 billion worth of taxation on the business community. I am expecting to see that $1 billion re-invested in Louisiana businesses -- in capital investments and in jobs.

      SS: Which other taxes would you like to see reduced or eliminated?
      Blanco: In Louisiana, we gradually need to rebalance [the tax structure]. We have a very high property tax exemption -- the first $75,000 of our homes' value is not taxed. One of the things that we have to do before anything else can be done is make sure our properties are on the tax roll at the proper value, so they more closely resemble market value. That has been one of the questionable pieces of our tax base. Those taxes are only the local governments' right now. The state does not collect property tax at all. The point is to strengthen local government so they can become less dependent on the state.

      SS: You have identified the state's Rapid Response Fund as needing to be more competitive with neighboring states. What needs to happen there?
      Blanco:We're being very aggressive and trying to seek businesses of all kinds and sizes. In some instances, we need to be able to move very quickly. On some very large projects, you have to go back to the legislature and work the deals out in a special setting. But on some of the smaller ones, we want to be able to move quickly and make firm commitments without having to jump through hoops. So we're trying to develop a larger Rapid Response Fund available for that.

      SS: Are there other hurdles to overcome in order to make Louisiana more competitive?
      Blanco: In this session, I have focused on an ethics package. Louisiana has suffered from a negative political image for a number of years now. We are moving into this modern economy, and we are definitely trying to improve the state's image as a good place in which to do business. In this legislative session, I have made it my highest priority to present a package of ethics bills that are intended to clean up the image of Louisiana both internally, so our people feel better about the state, and for the benefit of those we are inviting to come do business here. We've had some pretty rotten politics in the past, and it's always hard to overcome that kind of reputation.
      Yesterday [May 26th], a bill passed unanimously in the Senate that says that legislators and the governor will not have fundraisers or raise money or accept money during regular legislative sessions. Some states have been doing that for years. The legislature here never thought there was anything wrong with that. But there is a very strong perception that we needed to address. It passed the House already, and now it's passed the Senate. Sure there was some debate, but it came out just the way we wanted it to. I'm extremely proud of this legislature. I'm working with a group of people now who understand the sacrifices they need to make in order to get our image straight.

      SS: For several years, Louisiana has had an industry cluster program in place, which I understand is being decentralized, and ultimately will be run on a regional basis rather than from Baton Rouge. Is this the case, and what is your view on the state's role in fostering industry clusters?
      Blanco: We have had this cluster model for a few years now, and it's beginning to mature. It's based on some solid thinking of trying to build additional value around core industries. I like that idea. We also have regional directors who are out there identifying opportunities and sending information to the cluster directors who put the state in the mix. Anytime you try to put a new process in government with a new team, it takes a little while for the synergies to kick in, but we're beginning to see that happen.
      We are developing strong local partners with our regional economic development organizations that emanate from the local communities. After all, economic development is at the local level. A company doesn't exist in a vacuum called the state. It is physically in a location within the state. Our regional partners are getting more sophisticated, more business-oriented in terms of what new businesses look for and how they expect to be treated. So we have a lot going on here. We bring our local folks together on a regular basis, and I interact directly with our local economic development force. We act as a team in many cases. You have to have a partnership to put the packages together successfully.

     SS: With white collar energy jobs leaving the state, what can be done to keep Louisiana's energy industry alive and well? What are the state's chances of landing some liquefied natural gas [LNG] terminals?
     Blanco: Louisiana is extremely well poised for the liquefied natural gas industry. We have this coastal location -- the LNG comes in by ship. We have several applications on the table right now for regasification plants. Louisiana has the internal structure -- the pipelines that are already laid throughout the state to channel it out to the nation. That is definitely one of the petrochemical industries that Louisiana has an enormous future opportunity to develop. And we have a lot of independent oil companies, which are homegrown companies -- some are service companies, a lot of them are R&D. We're growing our own. They still interface pretty strongly with what we call the majors, who are mainly headquartered in Houston.
      Major energy companies' regional offices also are addressing offshore drilling opportunities, both deep water and shallow. Companies are drilling deeper in the shallow waters. There are many opportunities out there. Our oil and gas industries seem to be very healthy now, but the cost of oil is so high now. And they're not going to go out and extend themselves beyond their capacity just because the price of oil is up right now. They learned some difficult lessons back in the 1980s, when the industry collapsed. We were moving toward this $40 barrel back then, and then it went to $10. So I see them approaching this in a very cautious and reasonable manner. We're working hard to attract investment from the majors, because they still own a lot of our drilling opportunities. I am very optimistic about the future there.

      SS: Automotive projects are going to many southern states, but not to Louisiana. Is this an industry you would target, and if so, how?
      Blanco:  There are some opportunities for us in the automotive industry, and it's a matter of getting ourselves site ready, a little bit better prepared and a lot more aggressive. In the past, Louisiana was not aggressive in seeking out the automotive plants in particular.

      SS: Are there any physical infrastructure projects -- such as bridges, highways or port expansions -- that you feel should be fast-tracked in order to attract industry to the state?
      Blanco: We're going to continue to invest in our ports. The cruise line industry is building very rapidly in the New Orleans area. I worked on that as Lieutenant Governor and had a direct hand in helping to encourage more cruise lines to come to the city. Because of our efforts, the port has outgrown its capacity, and cruise lines are waiting to get berthing spots there. Shipbuilding is still a very big thing here in Louisiana. I have spoken with two groups recently interested in building ships -- one in western Louisiana and the other in eastern Louisiana. So that's alive and well, and we'll be seeing a good bit of that. Aviation and aerospace manufacturing are also important to us. Also, we are developing our universities' strength in information tecnologies, in the life sciences, in advance materials and in micro- and nanotechologies. And our entertainment industry is taking off as well.

     SS: What impression do you want potential corporate investors to leave with if they were to visit potential project sites in Louisiana?
     Blanco: That Louisiana is a business friendly state, that it's an honest place to do business and that it's a state committed to developing both our existing and emerging industries."