The Louisiana Legislature walks on a marble floor paid for by oil money, but now is finding that it's politically slippery, involving an ultimatum from energy executives: Give us our tax breaks or else.
The “or else” part is debatable. Where is the industry going to build a new refinery or plastics plant? Vermont? Louisiana is a hub of pipelines and source of energy production, not to mention the Mississippi and Calcasieu rivers for transport and water supplies.
When Gov. John Bel Edwards acted unilaterally to reduce one of the industry’s biggest breaks, most recognized that an essentially automatic 10-year exemption from local property taxes was a bad practice.
It was granted by the state without regard for local wishes. Good-government conservatives — not anti-industry — have argued for years if not decades that parishes, cities and school boards ought to be more able to fund their own operations.
The 10-year exemption, reduced to 80 percent of new projects by Edwards’ 2016 order, remains lavish.
All that said, 20 percent of big projects gives local government in industrial parishes a nice chunk of change. Can the oil-and-gas leash pull lawmakers back in the legislative session of an election year? Apparently not, as bills challenging Edwards' decision have faltered.
We agree with the industry that a predictable process is good for business recruitment. But industry critics are right that locals ought to have a say in huge reductions in their property tax income. Small businesses don't get those kinds of breaks.
If the industry wants not predictability but certainty — what they had for decades under the old process — that can only be achieved by a local “approval” that is overwhelmingly dominated by state officials, as often as not unelected appointees of the governor — and many of them nominated by industry.
That's not draining the swamp, by any stretch.
The state recently reported that by a 10-to-one margin local governments have approved some 75 applications for tax exemptions. So a 90 percent approval rate for an 80 percent tax exemption isn’t enough?
If the industry can make a strong case for changes to the rules, we think Edwards should try to accommodate them. He has shown himself willing to do so, but not at the expense of local revenues. The idea of legislative short-circuiting of the current process makes the legislators involved look like puppets in an industry theater.