A proposal to change the rules for Louisiana’s largest corporate tax break to make it easier on businesses seeking the exemptions was narrowly advanced by a House committee Monday, despite objections from the governor’s administration and after a lengthy debate over the program’s merits.
House Concurrent Resolution 3 as proposed by state Rep. Rick Edmonds, R-Baton Rouge, would roll back the number of local officials who could vote on Industrial Tax Exemption Program applications as outlined in Gov. John Bel Edwards’ reforms of the program. Instead of the full school boards and local councils voting, three members would make up a “local review board” that would take up the applications.
The proposal now goes to the full House for approval. If both the House and Senate pass the legislation, the rules governing the ITEP program would change.
Edmonds, backed by several industry groups like the Louisiana Chemical Association and Louisiana Association of Business and Industry, pitched the move as a way to simplify the process for companies. He said changes to the program made by Gov. John Bel Edwards three years ago have caused “confusion.”
“This is not a defense or denial of ITEP,” Edmonds said. “This is about bringing simplicity to how a business can relate to us in Louisiana.”
But the governor’s executive counsel, Matthew Block, testified against the idea, and suggested the governor may not sign ITEP applications under the process outlined by Edmonds’ bill. The Louisiana Police Jury Association and Together Louisiana were among the opponents to the proposal, arguing three people is not enough input from locals.
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Since Edwards’ revamped the ITEP program, a handful of companies have been rejected by locals for ITEP applications. ExxonMobil’s rejection for two tax break applications by the East Baton Rouge School Board set off a wave of protest by industry groups, who once supported the new rules but now argue more changes are needed.
“This resolution is in response to those communities saying no,” said Kendall Dix, campaign organizer for Healthy Gulf.
Guy Cormier, head of the Louisiana Police Jury Association, argued if businesses want to be exempted from local property taxes, the least they can do is meet with three local bodies to win their support. Police juries throughout the state support business and aren’t in complete opposition to ITEP as an incentive, he added.
“This whole discussion is about one application that was denied in East Baton Rouge Parish,” Cormier said, referring to the ExxonMobil request. “If that application was not denied, Rep. Edmonds would not have brought this legislation.”
Edmonds denied that was why he brought the bill, and said no person or group asked him to bring the legislation.
The Louisiana Association of Business and Industry has in recent months pushed for a more streamlined process and a “single point of contact” in each parish for businesses seeking the tax exemptions.
Several multibillion-dollar manufacturing projects that are just getting underway in Louisiana are benefiting from tax benefits locked in thre…
The Industrial Tax Exemption Program, or ITEP, is a controversial tax break for manufacturers that gave manufacturers a seemingly automatic 10-year exemptions for decades. Edwards scaled it back to 80 percent exemptions, and gave local school boards, governing authorities and sheriffs a vote on whether to exempt their local tax revenue.
An Advocate series in 2017 found companies have reaped billions in tax breaks from ITEP over the decades, all while cutting jobs.
Currently, local school boards, governing authorities and sheriffs, as well as the state Board of Commerce and Industry, all have the ability to vote on whether to exempt manufacturers from local property taxes. Edmonds’ proposal consolidates that power to the head of the parish, the head of the school board and the sheriff.
Edmonds said in Baton Rouge, that would mean Mayor-President Sharon Weston Broome would have a seat on the board, but not the Metro Council.
Edmonds also conceded that Edwards could simply reject the applications passed through the new process if his resolution went into effect, but he said “what a shame that would be,” and added his resolution changes the rules for the program, not Edwards’ executive order.
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