Telling stories of busted printers, teachers paying for fields trips out of pocket, and parents fundraising all the time for their schools, a Louisiana teachers union on Monday urged politicians serving on a Baton Rouge committee to scale back the controversial Industrial Tax Exemption Program, saying it’s depriving local public schools of millions of dollars.
“I work in a school that was built in 1960 and it looks like it was built in 1960,” said Crystal Williams Gordon, a teacher at Broadmoor High School and a member of the union, the Louisiana Association of Educators.
Echoing others who spoke Monday, Gordon said for years she’s routinely spent her own money to cover things her students lack.
“For 23 years, I’ve been paying for things for my students, but that has got to come to an end,” Gordon said.
The Industrial Tax Exemption Program, or ITEP, has been been around for decades. It gives manufacturers a break on their property taxes for capital projects.
Until 2016, the state alone decided when to give companies a break on the local property taxes and in the process rarely imposed any restrictions. Under an executive order that year by Gov. John Bel Edwards — an order which also made the program less generous — local officials now have a say in whether to approve those tax breaks and under what conditions.
The East Baton Rouge ITEP Committee, formed months ago, is composed of representatives of the parish Sheriff’s Office, School Board, Metro Council and Mayor-President Sharon Weston Broome’s office.
The Louisiana Association of Educators has been putting pressure on the ITEP Committee members in advance of its meeting Thursday, when it is expected to consider at least three competing proposals. In addition to Monday's press conference, held at its Baton Rouge office, the union is running ads on social media urging people to contact members of the committee.
At the press conference, several speakers criticized a proposal championed by two of those on the committee, School Board member Micharel Gaudet and Metro Councilman Matt Watson. Their formula favors large capital projects in determining which companies would get tax exemptions, but does not require that they add employees to their payrolls over time. The proposal is similar to one recommended by the Baton Rouge Area Chamber.
BRAC and other business leaders have warned that further reining in the ITEP program could hurt economic development, while critics, particularly the group Together Baton Rouge, have called for stricter rules for the incentive program.
Together Baton Rouge organizer Broderick Bagert also spoke at Monday’s press conference. Bagert unveiled a new analysis looking at the 22 ITEP applications filed in East Baton Rouge since Gov. Edwards’ 2016 order. To conduct its analysis, Together Baton Rouge used a commercial economic development planning software known as IMPLAN.
The resulting analysis, Bagert said, suggests that Gaudet and Watson are seeking to reward the wrong people when it comes to creating jobs.
According to the Together Baton Rouge analysis, if granted in full, the 22 exemptions on the table would cost East Baton Rouge Parish $11.5 million in year one and $71.1 million over an eight-year period. East Baton Rouge Parish schools together with public schools in Zachary would lose $5.2 million in year one and $32.1 million over eight years.
“Ninety-seven percent of the $71.1 million is for just four companies,” said Bagert, with ExxonMobil and its affiliates accounting for three quarters of that grand total.
Nine other companies submitted much smaller requests that would cost only $2 million in property taxes over eight years, and yet would create a net total of 117 jobs.
By contrast, according to the analysis, Formosa Plastics’ capital investment would create a net of just seven jobs. The other big three, ExxonMobil, Georgia-Pacific and Albemarle, would not only create no jobs at all, Bagert said, if lost public revenue is factored, those exemptions would result in 88 fewer jobs parishwide over an eight-year period.