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EBR School Board member Michael Gaudet gives reasons for his proposal to postponed action on new proposed guidelines for granting industrial tax exemptions. They are similar to ones that the Metro Council approved Nov. 14. But the changes have prompted the group Together Baton Rouge to blast the new document and Gaudet wants to refine the wording, not create a loophole.

The East Baton Rouge Parish School Board on Thursday advanced guidelines for handling requests for industrial tax exemptions after dropping a controversial provision that would have provided exemptions to projects with a positive impact on the environment but failed to produce at least 15 new “permanent, full-time” jobs.

The board voted 7-1 in favor of the revised guidelines, with only board member Connie Bernard voting no. Board member Dawn Collins was absent.

A final vote is now set for the board’s Jan. 17 meeting.

Bernard sought unsuccessfully to amend the guidelines to give the board the option of not holding a public hearing on future exemption requests, though she said it was unlikely the board would do that. Not scheduling a hearing would have the effect of allowing a tax exemption to take effect without public debate.

“My change is only to give us more flexibility,” Bernard said.

Other board members disagreed, worried that not holding a debate, even on unopposed requests, would spark a public outcry.

The guidelines are the culmination of years of debate over how best to remake Louisiana’s decades-old Industrial Tax Exemption Program, or ITEP, which 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 changes have sparked intense public and behind-the-scenes debate, pitting business groups favoring fewer restrictions on the exemptions against community activists and school employee organizations that want more limits on when exemptions are granted.

The School Board’s proposed guidelines are modeled on, but not identical to, guidelines approved Nov. 14 by the Metro Council.

Last month, the faith-based group Together Baton Rouge attacked the School Board's initial draft, saying the differences between it and the Metro Council’s language served to "gut the measure entirely and transform it into a rubber stamp."

The proposed no-new-jobs-needed for environmental projects provision sparked pointed criticism, with Together Baton Rouge arguing that companies could repackage routine upgrades as projects that benefit the environment. Local teacher unions allied with Together Baton Rouge on this issue had similar criticisms.

The reaction on Thursday to the revised guidelines was more positive.

“We appreciate that you have taken leadership on this and have addressed our concerns,” Edgar Cage, a leader with Together Baton Rouge, told board President Mike Gaudet. “We think these standards are now much stronger.”

Cage, however, urged the board to make two more changes to the guidelines:

  • Apply them to ITEP applications submitted after June 24, 2016 — the day Gov. John Bel Edwards issued an executive order revamping the program — not Aug. 20, 2018, when a second set of rules went into effect, supplanting Edwards’ order.
  • Allow the board to waive the guidelines and reject all ITEP applications if the school system is facing “financial difficulty or is in a deficit as is currently the case."

Cage noted that Edwards’ 2016 order grandfathered in all outstanding requests. He said there are 23 potential ITEP requests in the pipeline that seek to take hundreds of millions of dollars in property off the local tax rolls. These requests could still reach the School Board since they were submitted between Edwards’ original order and the new rules taking effect, he said.

ITEP critics have trained their fire on two Exxon exemption requests that the School Board is scheduled to debate Jan. 17.

In mid-December, the state Board of Commerce and Industry approved the requests over objections from schoolteachers and organizers with Together Baton Rouge, who urged rejecting them because the work was completed in 2017.

Teacher union leaders who spoke Thursday argued that it’s a bad time to issue any new ITEP exemptions given the school system’s poor financial condition. Superintendent Warren Drake has a team looking now for $30 million to $40 million in savings to stave off future red ink.

“It makes absolutely no sense to me to approve an exemption for a company like Exxon that is operating in the positive, and we’re operating in the negative,” said Angela Reams-Brown, president of the East Baton Rouge Federation of Teachers.

Glenda Pollard, a real estate agent in Baton Rouge, urged caution, saying that if they feel “bullied,” industrial companies will forego new investment in favor of more welcoming places.

“These are wonderful jobs and we need them here and we need them buying houses, not leaving and going to Texas,” Pollard said.

Follow Charles Lussier on Twitter, @Charles_Lussier.