The East Baton Rouge Parish School Board has given an electrical repair company an industrial tax exemption even though work on its north Baton Rouge project was completed months ago — the key reason the board rejected two exemption requests last year from energy giant ExxonMobil.
Etheredge Electric Co.’s successful request also came despite board guidelines that it “shall not grant” exemptions for projects where construction has already begun.
The Shreveport company, though, had a sympathetic story to tell.
Last March the company purchased an old Baton Rouge motor shop and within a few months had upgraded its old equipment so it could repair electrical motors to more modern standards. The Plank Road shop is in an economically depressed area that’s seeking redevelopment. And it’s pursuing a relatively small tax break compared to requests the board has considered in the past.
Faith-based Together Baton Rouge and allied education groups long critical of industrial tax exemptions, however, urged the board, to no avail, to stick to its guidelines, lest it invite other companies to seek after-the-fact exemptions.
“We don’t want to oppose but we must, because it’s not an incentive if the work has already begun,” Dianne Hanley, a leader of Together Baton Rouge, a nonprofit group long critical of industrial tax exemptions.
The vote for Etheredge on Thursday night was 6-2, with only board members Tramelle Howard and Dawn Collins voting no. Board member Evelyn Ware-Jackson abstained.
The East Baton Rouge Parish School Board on Thursday voted just before midnight Thursday to reject two controversial requests for industrial t…
The decision to sidestep the guidelines, which were approved Jan. 17, 2019, the same night the board rejected ExxonMobil, prompted suggestions that the board revisit it soon and reconsider the parameters under which future requests could be waived.
Etheredge Electric applied last year for a tax break through Louisiana's 83-year-old Industrial Tax Exemption Program. ITEP allows property tax breaks to manufacturers that plan to spend money on expansions or improvements. In June 2016, Gov. John Bel Edwards ordered that local government have a say in the state’s decades-old program.
Etheredge’s tax break request now heads to the Metro Council, which is scheduled to consider the matter Wednesday. The Metro Council and the sheriff have until the end of February to make a decision. If they take no action, the exemption will go into effect.
Etheredge’s tax break stems from a $91,500 investment in its new Baton Rouge facility. That’s tiny compared with ExxonMobil’s $67.3 million worth of upgrades to its refinery and its polyolefins plant.
In getting the exemption, Etheredge will avoid an estimated $3,764 in taxes over the next 10 years. ExxonMobil, by contrast, was forced to pay $2.9 million in school property taxes — which averages out to $290,000 a year — over the space of a decade.
Donnie Miller, a director of business development for the Baton Rouge Area Chamber, said the project was conceived and executed fast, while Etheredge’s unfamiliarity with the ITEP process along with the slow pace of state government caused the exemption request to take months longer than it should have to get through the Louisiana Department of Economic Development.
“I’m not going to put the full blame on the state,” Miller said. “It’s a company that’s never filled out this type of paperwork before, and they didn’t have someone to lean on to ask, ‘Did I fill this out correctly, is this what you need?’”
The request split the five board members who rejected ExxonMobil’s request 12 months ago.
Board members Lanus and David Tatman, who had opposed ExxonMobil, supported Etheredge.
Lanus said the area Etheredge has moved into is crime-ridden and in need of investment.
“We don’t have another business within that area, and to see us to lose one by a mere $3,000 or a little over $3,000, I think (exempting that much money) is something we can do.”
Collins and Howard voted against the Etheredge request, while Ware-Jackson abstained. Collins was clearly torn.
“I feel bad because it’s a negligible amount and I want to show support to small business, but I also don’t want to be a hypocrite,” she said. “You know Exxon was saying some of the same stuff.”