The debate over what guidelines the East Baton Rouge Parish Metro Council will use on future industrial tax break requests was settled Wednesday.
The council adopted stipulations proposed by Councilman LaMont Cole that include requiring businesses seeking tax cuts to create at least 15 permanent, full-time jobs — or 10 percent of the business' "pre-project employment" baseline.
Those numbers are lower than what Cole originally suggested in proposals before Wednesday night's meeting, but he said the reduction in the job creation benchmarks was an effort to reach a compromise between those in opposition of the state's Industrial Tax Exemption Program and proponents who see the program as a vital component in making the parish an attractive option for industries.
"We as protectors of the taxpaying dollars … should not allow companies to have tax exemptions if, at a minimum, they're not going to seek to create jobs," Cole said in a speech before the 10-2 vote.
The Metro Council's attempt to craft guidelines for granting future tax breaks to industry in East Baton Rouge Parish in a bipartisan fashion …
Councilmen Dwight Hudson and Scott Wilson voted against Cole's stipulations, which sparked a near two-hour debate.
The state's ITEP program is designed to give manufacturers breaks on their property taxes in return for new capital expenditures.
Cole and Watson have led the Metro Council's efforts to establish the city-parish's own set of guidelines regarding what factors would play into their approval or rejection of tax break requests after Gov. John Bel Edwards in an executive order gave control over the tax exemptions to local taxing authorities.
Those decisions were previously made at the state level.
Cole's original proposal stipulated that a company create at least 25 permanent full-time jobs, or 15 percent of the company's pre-project baseline employment level.
But it received a lot of behind-the-scenes pushback from industry officials and from organizations like the Baton Rouge Area Chamber, whose representatives said those numbers would hurt small businesses.
Liz Smith, BRAC's senior vice president of economic competitiveness, said increased sales tax revenues spurred by industrial companies' capital investments in new projects and/or facility expansions are more economically beneficial to the parish than new jobs.
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"The state relies heavily on sales tax," she told council members Wednesday. "Sales tax come from capital investment. Capital investments create indirect jobs."
Other pro-industrial speakers threw their support behind Watson's set of proposed guidelines, which didn't focus on job creation. Instead, Watson's version required analysis from the Louisiana Economic Development Department, which he consulted with on his proposed guidelines, proving that a project would spur more tax revenues over 15 years than the original tax break.
Watson's stance on ITEP guidelines has been largely criticized by Together Baton Rouge, whose members and supporters said he just wanted to rubber stamp any tax break request the council receives. The councilman has denied that's the case.
After Wednesday's vote, TBR leaders were pleased with the guidelines while expressing disappointment in the job benchmark being reduced.
"This will be what is needed to get the needed funds and have industry pay their fair share and have things go forward in a better way for our parish," said Dianne Hanley, a volunteer leader with TBR.
Watson tried to get some of his stipulations amended into Cole's guidelines, but those attempts were shot down by a majority of the council.
"I'm pretty happy with what LaMont brought forth today," Watson said during the meeting, after having characterized Cole's proposal the day before as a "shady hustle" and accusing Cole of bending too much toward the desires of TBR.
"The change with the job requirements was a great compromise," Watson said Wednesday.
Husdon expressed some concerns over the guideline's job creation component as well and tried to get the item deferred so future tweaks could be made. That also was overruled by a majority of the Metro Council.
"I didn't bend to the will of Together Baton Rouge, I bent to the will of the people," Cole said. "All we’re saying to you is try to create one job if you’re a small business. If you’re a big company, try as best you can to create at least 15 jobs. I don’t think that’s too much to ask."
Editors note: This story was updated Nov. 15 because a previous version incorrectly stated that Watson voted in opposition of Cole's proposal. The Advocate regrets the error.
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