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Adam Knapp, president and CEO of the Baton Rouge Area Chamber ( BRAC), speaks at the lectern during the Industrial Tax Exemption Program (ITEP) committee meeting concerning a tax exemption for the Exxon Plastics Plant Monday March 26, 2018, in Baton Rouge, La.

A recent guest column published on Nov. 13 inaccurately portrayed how Louisiana’s Industrial Property Tax Exemption Program works. ITEP encourages businesses to invest in the state by allowing local governments to delay property taxes on new projects or major expansions for a set period of time. Those projects still pay sales and other taxes from the beginning of the project.

The ITEP program is fundamental to the creation of manufacturing jobs in the state. Without it, Louisiana would have the highest taxes in the south and the seventh-largest in the nation for new manufacturing projects. If local governments decide not to grant ITEP applications, most of the projects would decide to invest elsewhere and those governments would never receive any tax revenue.

Guest column: Invest for jobs wisely

While there is quite a bit of rhetoric about the ITEP program, we tend to forget how the economy works. Governments grant tax exemptions to encourage new business investment. Governments are not giving money to companies; they are delaying payment of property taxes for the first few years of a project that, once constructed, will pay millions in property taxes for decades. If those projects had chosen not to locate in Louisiana, there would not have been money to exempt.

This past year, Louisiana came out of a 28-month recession. Economist Loren Scott, in his most recent economic forecast, said the state is poised to regain many of the jobs lost during that recession period for one key reason: the prosperity of our chemical and industrial sectors. He noted that since 2012, industry has created nearly 19,000 new direct jobs, and that every job created by a chemical plant creates more than eight jobs in other parts of the economy — these are small business owners, contract workers and other occupations integral to our state. In short, there is no way Louisiana could have climbed out of a steep recession without the revenue generated by the construction in the chemical industry.

The Louisiana chemical industry annually generates more than $1 billion dollars in revenue for local governments, more than $1.1 billion to the state treasury and $79.7 billion in sales for businesses in our state. Currently, chemical industry taxes pay the salaries of at least four of every 10 public school teachers in Louisiana. In addition, within the next four years, more than $14.5 billion of industry investments will come onto local property tax rolls when their exemptions expire.

Industrial property tax exemptions are granted in 37 other states. It is not a unique concept; it’s simply one that works. It allows the state to compete for new investment and expansions to existing manufacturing in Louisiana. Further, it helps existing facilities compete for additions and improvements that could go to facilities in other states and countries.

The Louisiana chemical industry is the cornerstone of the state’s economy and is an essential part of Louisiana’s future. The more than 29,000 people directly employed by Louisiana’s chemical industry pay taxes, bring good jobs to the state and contribute to the communities in which we operate. Our state has been blessed with an abundant supply of natural resources and a strategic geographic location unparalleled by any other state in the nation. ITEP is an integral part of that picture and it helps assure our state’s continued growth.

Gregory Bowser

president, Louisiana Chemical Association

Baton Rouge