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Sen. Mike Walsworth, R-West Monroe, asks a question about funding of the state's deferred maintenance needs, during presentation of Gov. John Bel Edwards' Fiscal Year 2017-2018 Executive Budget proposal to the Joint Legislative Committee on the Budget, Thursday, Feb. 23, 2017 at the State Capitol.

ADVOCATE STAFF PHOTO BY TRAVIS SPRADLING

The Public Affairs Research Council of Louisiana's Robert Travis Scott began wading into the group’s analysis of this election’s constitutional amendments thinking all three were the most boring ever placed on a Louisiana ballot.

But he admits being wrong.

PAR soon discovered that, for instance, the first amendment voters are being asked to sort out is a thorny tax issue that could recoup hundreds of millions of dollars in taxes lost to exemptions but could lead to years of court battles.

“It sounded like it was going to be real simple. But once we started talking to people, we learned it was more complex,” said Scott, head of the 67-year-old Baton Rouge-based government policy group.

It turns out that Amendment No. 1 on the ballot addresses a long-held practice that appears to be at odds with equally old laws and regulations.

Although the results of major races in the low-key Oct. 14 election — state treasurer, New Orleans mayor, public service commissioner — likely won’t be decided until the Nov. 18 runoff, voters will know by the end of election night which of the three amendments will be added to a state constitution that has been amended 186 times since 1974. (The U.S. Constitution, by way of comparison, has been amended only 17 times since 1791.)

Amendment No. 1: Clarify how to tax projects while construction is in progress

Amendment No. 1 would exempt property taxes until construction is completed and used for its intended purpose.

Though not in the Louisiana Constitution, exemption during construction has been the practice for years, with a few exceptions during the 1930s. But state law and regulations require assessors to levy tax appraisals uniformly and fairly, which, in the case of drawn-out construction, means to some taxing authorities that they need to start collecting while the work is in progress.

State Sen. Mike Walsworth, the West Monroe Republican who sponsored the amendment, gave variations on the same quote when selling the legislation that became the ballot measure.

“Even though it has been our practice for 60 years, there’s nothing in the constitution that says you can’t assess (taxes during construction), and that’s become a big issue, especially with the big industrial projects,” Walsworth said during legislative hearings.

Usually, assessments are made at the beginning of the year, and because most construction takes less than a year to complete, that practice worked out well.

Many of the new mega-plants along the Mississippi River and in southwest Louisiana are taking much longer to build, which put some parish officials in a legal quandary.

In 2016, Cameron Parish authorities began an audit seeking to assess property taxes on construction materials used in a portion of Cheniere Energy’s $20 billion liquified natural gas export facility at Sabine Pass.

Brian Eddington, a Baton Rouge lawyer representing the Louisiana Assessors’ Association, told lawmakers that part of the facility had been completed and was liquefying natural gas for export, while the rest of the plant was still under construction and would be for years.

Other states handle taxing construction work in different ways, with some waiting until completion and others assessing the full value of the project from the get-go. A few states — including Louisiana, if this amendment passes — tax thoseparts of the plant as they become useful.

Walsworth argued that forcing companies to pay taxes before the new plant produces revenue is unfair, given the longtime practice, and would become another obstacle to attracting investment. Also, although the issue right now is focused on the mega-projects, future decisions by the Tax Commission and the courts could lead to taxation during construction for other activities, such as homebuilding.

Opponents contend that businesses already receive a lot of largesse in the form of tax exemptions. Dragging out construction deprives local governments of the funds needed to improve roads, law enforcement and schools that handle the increased populations and loads generated by the new facilities.

Gov. John Bel Edwards and the Louisiana Economic Development agency support the measure, as do special-interest groups for the housing and energy industry. Both the Louisiana Municipal Association and the Louisiana Police Jury Association, which represent local governments, also back the plan.

The Louisiana Assessors' Association has not taken a position.

“One thing that’s very clear is that this is not a small issue,” writes Council for A Better Louisiana in support of the amendment. Baton Rouge-based CABL is a policy advocacy group whose board includes business, law firm and government executives.

Amendment No. 2: Property tax exemption for surviving spouses of more first responders killed while on duty

Amendment No. 2 would exempt the surviving spouses of first responders who died while on duty from property taxes on the home of the deceased. It closes a hole in the law that was approved overwhelmingly by the Legislature and by voters last fall.

The amendment adds emergency medical responders, technicians, paramedics and volunteer firefighters.

“The whole idea is to help them get back on their feet after their spouse died in the line of duty,” Rep. Ray Garofalo Jr., R-Chalmette, told his colleagues during debate. “It’s a very noble idea.”

Legislators agreed and nobody voted against putting the measure on the Oct. 14 ballot.

“The effect on the homestead property tax base may be relatively small, but the bill can only result in a reduction of that tax base,” the Legislative Fiscal Office wrote.

What happens when property taxes are forgiven for some is that local governments redistribute the burden on the remaining taxpayers.

CABL raised that issue in deciding not to take a position on this amendment. While first responders deserve special consideration, this exemption, like all tax breaks, leads to higher rates for those who do not qualify. “It should be noted that as we continue to add more exemptions to our tax laws, the costs to other taxpayers do begin to add up,” CABL wrote.

Amendment No. 3: Establish a “Construction Subfund” of the Transportation Trust Fund.

Voters are being asked to decide a measure that links any future hike in the state gas tax to a fund dedicated to nothing but construction of road and bridge projects.

Amendment No. 3 was part of efforts to increase the state’s tax on gas at the pump. Supporters, including the business community, said more money was needed to maintain roads and chop away at a $12 billion backlog of projects that have been deferred over the years because of a lack of money.

But the tax hike proposal ran into a buzz saw of opposition because, in recent years, close to $100 million was being diverted annually from construction projects to instead fund the Louisiana State Police and the administration of the state Department of Transportation and Development. Under current rules, road and bridge money is kept in the Transportation Trust Fund, which is used for road and bridge building, and which also can finance salaries and benefits.

Hopes were those criticisms could be answered by creating a new sub-fund repository for any new gas taxes that would be used only for construction and maintenance of road and bridge projects.

That change, aimed at boosting voter confidence, passed. The higher gas tax failed.

But the sponsor of the ballot measure, state Rep. Major Thibaut, D-New Roads, said he decided to push ahead with the plan despite the failure of the drive for a gas tax boost.

Thibaut said crippling state road and bridge problems mean some kind of revenue-raising measure is inevitable.

“Everybody knows we have an infrastructure problem,” he said. “It doesn’t take a rocket scientist to figure out that if we are going to keep up, then we are going to have to fund it.”

Critics counter that the change is largely symbolic.

“It creates a fund with no funds,” the Public Affairs Research Council said in its review of the amendment.

DOTD Secretary Shawn Wilson said he likes the concept spelled out in the amendment. “I would like it more if we had money to put into it,” he said.

Will Sentell of The Advocate Capitol news bureau contributed to this report.

Follow Mark Ballard on Twitter, @MarkBallardCnb.