The voices are growing louder, as is the frustration, on a recurring theme that the City of New Orleans isn’t getting its fair share of tax dollars or losing out completely. Based on our significant infrastructure and public safety needs, I’m glad to see this grassroots push for fairness, which includes support to rein in one of the most irresponsible giveaways in Louisiana; the Industrial Tax Incentive Program. Since 1998, ITEP has cost the City of New Orleans and Orleans Parish School Board more than $210 million in lost property tax revenue, due to exemptions rubber-stamped by a state board. Yes, a state board can exempt local property taxes. In fact, the state Board of Commerce and Industry has a 99.95 percent approval rate for companies who seek the local property tax exemption. In 2017, this led to a $1.9 billion loss to local taxing bodies across Louisiana.
To receive the exemption, companies must meet job creation or retention guidelines. According to the nonprofit Together Louisiana, since 1998 in New Orleans, 39 companies have been granted 267 ITEP exemptions (expansion of current operations are also ITEP eligible). In their applications, the companies’ goals would create 4562 jobs. Unfortunately, instead, the result was a net loss of 76 jobs.
Seeing the need for reform, Gov. John Bel Edwards signed an executive order allowing local government bodies like the New Orleans City Council to be included in the exemption process and to set their own rules.
New Orleans businesses requesting local tax breaks through a controversial state program would need to provide well-paying local jobs and meet…
This means, finally, we have the opportunity to require better accountability for tax dollars regarding ITEP. I’ve proposed an ordinance, along with my colleagues, councilmembers Jason Williams and Cyndi Nguyen, that will set concise, concrete rules to rein in exemptions. Setting firm guidelines for good job creation, local and minority participation, and investments in distressed areas that need access to opportunity. This ordinance is not an attempt to eliminate ITEP, but it will add transparency to the process and send a clear message to large industrial companies that if they are seeking a major tax break from the city, then we expect them to bring real prosperity in return. The people of New Orleans know that we have many needs in this city, every dollar matters. I stand with those who are tired of New Orleans not getting its fair share, at least with this, we can start getting a piece back.
vice president, New Orleans City Council