The East Baton Rouge Parish School Board on Thursday voted just before midnight Thursday to reject two controversial requests for industrial tax breaks from the biggest taxpayer in the parish.
The 5-4 vote marked a rare defeat for ExxonMobil, which has received hundreds of such tax exemptions via the decades-old Industrial Tax Exemption Program, or ITEP, and a big victory for critics of the program, including the faith-based group Together Baton Rouge and school employee groups, including the two teacher unions.
“This is a new day for a new type of economic development in Louisiana,” an excited Dianne Hanley, a leader of Together Baton Rouge, said afterward.
“I am so happy. I hope this is the beginning of a new era of public funding and investing in my students,” said Mary Trigg, an art teacher at Sherwood Middle Academic Magnet School. “I’m excited that they will begin to have the resources they need for success. Yeah, democracy!”
After facing months of opposition from organizers that included a walkout threat from local teachers, ExxonMobil dropped two applications for …
After the vote, ExxonMobil representatives sound a more cautious note.
Stephanie Cargile, a spokeswoman for the company, said the company tried hard to follow the shifting rules for ITEP over the past two years, and spoke at length with local officials about their plans.
While the company is in a growth mode in Baton Rouge, with plans to add hundreds of jobs at its refinery this year, such growth can’t be taken for granted and future projects could go to Texas and to other company operations, she said.
“In order to compete, one of the many things that we do look at is cost,” Cargile said.
The board voted Thursday against granting ExxonMobil two property tax breaks, one for work at its Baton Rouge refinery and another at its polyolefins plant.
Here’s how the vote broke down:
Voting No: Board members Dawn Collins, Tramelle Howard, Dadrius Lanus, David Tatman and Evelyn Ware-Jackson.
Voting Yes: Board members Mark Bellue, Connie Bernard, Jill Dyason and Mike Gaudet.
The company was seeking exemptions from school property taxes worth about $2.9 million over 10 years. The work in question was completed in 2017, and ExxonMobil had a difficult time explaining while it still need a tax break for them.
In October, Ware-Jackson voted in favor of exempting a major proposed expansion at the polyolefins plant, but she had a different view of the work from 2017, noting that since it was complete it didn’t qualify as an incentive.
"I would be a lot more receptive for a new project, something that’s going to bring in new business, new jobs,” Ware-Jackson said.
Collins was more blunt: “The project is done. It’s over.”
Thursday night was the third time the School Board has been asked to weigh in on an ITEP tax break request since Gov. John Bel Edwards in June 2016 ordered that local government have a say in the state’s decades-old program. And it’s the first time the board has said No.
ExxonMobil’s ITEP exemptions have become central to a fiery debate over corporate tax breaks, teacher pay and economic development in the Capitol region.
Thursday’s meeting was no exception. It lasted almost 7 hours — about three of which were dominated by the ITEP issue. Dozens of speakers, for and against, went to the microphone.
"It’s not that we don’t like Exxon, but it’s time they put their big boy pants on and run their business based on their profit," said retired Lt. Gen. Russell Honore.
But company representative Megan Manchester noted that dozens of other companies have recently received after-the-fact exemptions.
ExxonMobil, which is currently seeking several controversial tax breaks for its Baton Rouge-area plants, has filed preliminary paperwork on a…
“Exxonmobil is being singled out for following the rules and following the advice we were given,” Manchester said.
The local debate is not over. ExxonMobil now turns its attention to the Metro Council, which is taking up the two requests next Wednesday. Sheriff Sid Gautreaux also has yet to weigh in. Both entities have until the end of February to decide. If they don’t act, the exemptions go into effect.
ITEP gives property tax breaks to manufacturers that plan to spend money on expansions or improvements.
Under new state rules that took effect on Aug. 20, approved projects receive an 80 percent property tax abatement — down from 100 percent previously — over 10 years, instead of eight in an earlier version.
But, in a big change from the past, local taxing authorities now have an opportunity to say “yea” or “nay” to the portion of the tax breaks that applies to them. In East Baton Rouge Parish, that includes the School Board as well as the Metro Council and Sheriff's Office.
The school system’s poor financial situation played into Thursday’s result. Superintendent Warren Drake is trying to find ways to save $30 to $40 million over the coming months in order to keep the system out of the financial hole.
"We are on life support, point blank period, and we deserve this money. I urge you to deny these exemptions," said Tia Mills, president of the East Baton Rouge Association of Educators.
The financial situation clearly weighed on Lanus, who took office last week. Lanus said he wants to find ways to pay for employee pay raises and to fund universal early childhood education. At one point, he asked ExxonMobil if it would be willing to give back half of the requested exemption.
"I really, really want to support industry in a collaborative way in this district,” Lanus said. “It’s very hard because we have a $30 million deficit, and we got a teacher shortage."
The East Baton Rouge Parish School Board on Thursday advanced guidelines for handling requests for industrial tax exemptions after dropping a …
Also in ITEP news, the School Board on Thursday finally followed the example of the Metro Council and adopted “guidelines” for which requests will get the board’s approval in the future. They were approved by a 6-3 vote, but apply only to requests submitted after the new rules took effect Aug. 20.
ITEP critics had urged moving that date back two years to June 24, 2016 when Gov. Edwards first ordered changes to the program. Collins made a motion to change the effective date, but board member Dyason offered a substitute motion, which prevailed, to preserve the guidelines as is.
Besides Collins, board members Tatman and Ware-Jackson voted against Dyason’s substitute motion.
In arguing for the exemptions, Exxon urged the board to look beyond the loss of property taxes in the near term and judge the requests over a longer time span of 20 years. That would capture the added property taxes paid when the exemptions expire. Over those two decades, the total of property taxes paid by the two Exxon properties comes to an estimated $21.2 million across the parish.
The company’s multi-million improvements at its Baton Rouge refinery resulted in 18 new full-time jobs, according to the company, while its more modest improvements at its polyolefins plant added no new jobs to the payroll; the company, however, pledges to keep the 244 full-time jobs already there if it earns a tax exemption.