The state board that oversees a lucrative property tax break for manufacturers dating back to Huey Long’s time opted Monday to postpone decisions on several of the applications still in the pipeline after the governor ordered new standards.
Gov. John Bel Edwards’ executive order stated that the Industrial Tax Exemption Program requests would be carefully vetted for how many jobs would be produced.
After four decades of automatically approving applications to exempt large manufacturers fro…
The new approval process is to apply to requests after June 24. But a number of the applications already were in the pipeline.
The Board of Commerce and Industry struggled to figure out how some of the details of the governor’s wishes would apply to those applications.
“Change is coming, but there are issues we need to work through,” said Robert Adley, who represents Edwards on the board. “It’s a timing issue that we’re desperately trying to work through.”
Diane Hanley, of Together Louisiana, told board members that five members of her family were flooded recently. It brought home to her the need for local governments to have the funding that has been diverted by the tax exemption. She said Edwards’ order was meant to take effect immediately. “It’s pretty clear what it’s saying,” Hanley said.
Last year, Ascension Parish gave up $106 million in property taxes that companies didn't hav…
Together Louisiana, a statewide association of clergy and public interest groups that favors higher taxes on big corporations and the wealthy, reports that Louisiana has the most generous industrial tax exemption in the country, allowing companies to avoid paying their property taxes to local schools, sheriffs and fire departments for 10 years, in two five-year increments.
Louisiana is giving away an average of $1.6 billion annually in tax breaks to large manufact…
Most states have an industrial tax exemption, but Louisiana is the only one that handles the grants without the approval of local governments, which otherwise would be in charge of collecting property taxes.
One the issues that puzzled board members was the provision that required less scrutiny for exemptions requested on investments of $5 million or less.
Richard House, counsel for the state Department of Economic Development, said Edwards doesn’t favor exemptions for minor construction investments. So, new applications are going to have to be creating new jobs.
Motiva Enterprises LLC timely filed requests for three exemptions, each worth less than $5 million, but listed no permanent jobs connected to the total of $1.6 million in tax relief.
Mandy Antono, the Houston-based tax advisor for the refinery, said she didn’t include job numbers because the new units, in total, increased overall production, which would require more hiring, but that the specific investments did not.
“I feel uncomfortable,” about signing an application naming a specific number of jobs under those circumstances, she said.
“You just told me that all three of the projects fall under the $5 million, conveniently,” Adley said, “but all are connected to the same production train. They should have been filed in one application.”
House said how to handle timely filed renewal requests for five additional years, at least during the interim, was up to the board.
Broderick Bagert, of Together Louisiana, argued that the state constitution was a five year exemption with the possibility of renewing for five more years. He viewed that renewal as a separate application and therefore those renewal application should be rejected.
Corporate officials countered that was not correct and that job creation was not a criteria when their exemptions were approved.
After 40 some-odd years on autopilot, members of an obscure board that routinely rubber-stam…
“We need some clarification from the governor on this,” said Jan Moller, a member of the board. The board voted to defer decision on many of the renewal applications.