The East Baton Rouge Parish School Board voted unanimously Thursday to put off for a month guidelines for handling requests for industrial tax exemptions after several board members and critics of the tax breaks said recent wording changes undermine many of the good things in the short document.
Board member Mike Gaudet defended the changes, but said he’s willing to keep working on them for another month. Gaudet said he’s trying to strike the right balance between encouraging economic development and improving school tax revenue.
“I don’t want you to think that anyone on this board is trying to give away money to industry,” said Gaudet.
East Baton Rouge Parish school employees have postponed their Oct. 31 protest walkout after learning the industrial tax break requests they op…
Tia Mills, president of the East Baton Rouge Association of Educators, didn’t see it that way, urging that the board to cease giving such exemptions at all when it comes to public schools.
"This is the poorest, richest state in the union. We need to do something to change that,” she said. “Stop giving the money away.
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The School Board plans to take up the proposed guidelines again when it meets on Jan. 4.
The push for a delay began Wednesday when a faith-based group critical of these tax breaks, Together Baton Rouge, attacked what they described as "several, subtle changes" to guidelines the Metro Council approved Nov. 14, saying the proposed changes serve to "gut the measure entirely and transform it into a rubber stamp."
After Thursday’s delay, Together Baton Rouge volunteer leader Dianne Hanley said she’s encouraged.
“I think we’re becoming more confident that they are really taking this all seriously and they are not just rubber stamping, so that’s good,” Hanley said.
The debate over what guidelines the East Baton Rouge Parish Metro Council will use on future industrial tax break requests was settled Wednesday.
The parish school system’s proposed guidelines preserve the most contested part of the Metro Council’s guidelines, namely that projects need to create at least 15 permanent, full-time jobs. But, unlike the Metro Council's version, the School Board would exempt from the job requirement any "environmental project" providing benefits for things like cleaner air, land and water above what's required by law. Together Baton Rouge has labeled that a “massive loophole."
Brod Bagert, an organizer with Together Baton Rouge, said that simply buying new equipment could earn a company a tax exemption.
“Every time you buy a car, your emissions are a little better,” he said.
Gaudet, who is a chemical engineer by training, said the contested provision is not a loophole but is modeled on something that occurs in Texas. He said it would encourage more environmental initiatives that are “above and beyond” the norm. He said he’s long cared about the environment, going back to the years he worked at Albemarle. He urged the board not to give up on offering such incentives.
“To do otherwise would be voting against clean air or clean water, which I don’t think we want to do,” Gaudet said.
The guidelines are the culmination of years of debate over how best to remake Louisiana’s decades old ITEP program, which gives property tax breaks to manufacturers that plan to spend money on expansions or improvements.
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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.
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.
After more than a year of deliberation, the East Baton Rouge Parish School Board is preparing to adopt guidelines for handling requests for in…
Together Baton Rouge was critical of new language that says the new guidelines would apply only to ITEP exemption requests begun after Aug. 20. The organization wants the new guidelines to apply to a handful of already completed projects that are in the pipeline but have yet to receive ITEP exemptions, including a handful from ExxonMobil. The organization wants to use the added tax revenue from denying these ITEP requests to increase the salaries of school employees as well as for other educational purposes.
And in another departure from the Metro Council’s guidelines, the School Board plans to ask the Baton Rouge Area Chamber to work with its finance department to devise the forms ITEP applicants will have to submit to establish “clear baselines and projections for the outcomes.” The Metro Council plans to rely solely on the city-parish's finance department to handle these duties.
Gaudet said he doesn’t want to make that the sole responsibility of the school system’s Finance Department because it would cost money to do it internally, those folks have other duties and tax exemptions are not their area of expertise.
Board member Kenyetta Nelson-Smith objected strongly to that idea. Nelson-Smith was defeated in her re-election bid on Nov. 6 and the Baton Rouge Area Chamber was one of the organizations opposing her.
“That’s extremely problematic for me,” Nelson-Smith said. “I prefer to have a neutral partner.”
Gaudet said he’d be okay with finding a different third party to handle those duties.