The Metro Council's attempt to craft guidelines for granting future tax breaks to industry in East Baton Rouge Parish in a bipartisan fashion appears to be crumbling.
Councilman Matt Watson has proposed an alternative set of proposed standards he'd like to see the council use in all its future decisions regarding tax cuts through the state's Industrial Tax Exemption Program.
Watson sent his proposal to fellow council members late Monday, three days after saying he wouldn't support the version of guidelines that Councilman LaMont Cole will present for a public hearing and possibly adoption on Wednesday.
Watson, a Republican, said the proposed guidelines from Cole, a Democrat, sound like "a shady hustle" that conflict with the state's rules regarding tax abatements for industrial businesses.
The state's ITEP program is designed to give manufacturers a temporary multimillion-dollar breaks on their property taxes while setting up new capital expenditures.
East Baton Rouge Parish Metro Councilman LaMont Cole wants his colleagues to consider inserting hiring benchmarks into a set of proposed guide…
Watson had said council members were working on a set of standards both Republicans and Democrats on the Metro Council would likely agree with.
However, he balked at proposed guidelines circulated by Cole, which include hiring benchmarks and language prohibiting a company from seeking tax relief on completed projects.
"These guidelines need to be a reflection of how we would vote on future requests," Watson said Tuesday. "If we can't agree, then ITEP requests would continually be taken up for consideration on a case-by-case basis."
Watson's guidelines don't hold a company's feet to fire when it comes to creating a specific number of jobs the way Cole's does. Instead, they require analysis from the Louisiana Economic Development Department proving that a project will net a positive return on investment for the city-parish within 15 years based on certain parameters involved in all new facilities and expansions on existing facilities.
Watson's proposal maintains his stance on restricting companies from stacking local Enterprise Zone sales and use tax reimbursements on top of the 10-year ITEP exemptions. They also place more emphasis on doling out tax breaks to companies investing money into improvements that will benefit the environment.
If a company fails to meet its job creation targets, or capital expenditure and/or environmental goals by more than 10 percent, the Metro Council would have the option to deny tax abatements during the last 5 years of the 10-year period, Watson's guidelines state.
Watson said in his email he won't be pushing his proposed standards up for a vote at Wednesday's meeting, he just wanted his fellow council members to be aware of them.
Cole is sticking by his version, which Watson also criticized for leaning toward the wants of faith-based group Together Baton Rouge, some of the most outspoken critics of the state's tax break program.
The group previously said earlier versions of the guidelines that Watson backed were so broad the Metro Council would essentially rubber stamp any tax break request without any stringent rules that could hold companies accountable for promises they might make about a project's economic benefit to the community.
"I like my version better because it seeks to protect the interest of the parish by asking companies to create jobs as well as seek prior approval before complete projects," Cole said in a prepared statement Wednesday.
Cole's version says a company needs to create at least 25 permanent full-time jobs or 15 percent of the company's "pre-project baseline" employment level to qualify for tax breaks from the Metro Council.
The guidelines from Cole also includes the clause, "Council may approve projects which do not meet the standards" outlined in the proposal "or deny projects that do meet those standards, should the council find compelling circumstances for doing so."
Watson said he thinks that gives off the notion that city-parish leaders will be making backdoor deals of some kind to approve tax breaks outside of the scope of state standards.
"Louisiana needs to make sure no one has those thoughts about it," Watson said. "Industry wants consistency and predictability."