Nearly half the St. Tammany Parish School Board voiced strong opposition on Thursday to an Industrial Tax Exemption Program application submitted by Diversified Foods and Seasonings LLC that would give the company an $802,000 tax break over the next 10 years.
There wasn’t enough dissent to derail Diversified’s application, however, and it was approved by an 8-6-1 vote during the school board’s April meeting at the Brooks Curriculum Center in Slidell.
Diversified is nearing the end of a $15.5 million expansion of its frozen foods plant near Madisonville and plans to hire 44 employees to work at the facility. Diversified CEO Peter Smith and St. Tammany Corporation CEO Chris Massingill said the expansion and job creation would put much more than $802,000 into tax coffers in the long run, but some school board members were not convinced.
Board members Matthew Greene, Shelta Richardson, Mike Winkler, James Braud, Dennis Cousin and Lisa Page voted against the resolution. Tammy Lamy abstained.
Richardson and Lamy were among the 10 school board members who voted to advance the Diversified ITEP resolution during the board's April 4 committee meeting.
They had a change of heart, however.
“I’m pro-business,” Richardson said. “I’m a business owner. I voted in favor (of the Diversified ITEP resolution on April 4,) but what transpired next was a countless series of emails and phone calls, people stopping to talk to me about what’s going on (with the resolution.) As an elected official, I’m obligated to listen to my constituents.”
Winkler said he spoke with constituents who said that if the board approved the tax break for Diversified, they would not vote for a $175 million bond issue on the May 4 ballot that would fund capital projects at parish schools.
“People see this as us turning down money from a business,” he said.
“Our education system provides (businesses) with quality employees. (Diversified) should be willing to pay us for that.”
Other board members were equally passionate in their support of the ITEP for Diversified.
Michael Nation noted that the school board has rolled back its debt service millage from 26 mills to 13.5 mills in recent years because of good stewardship with public money.
“We’re not giving away taxpayer money,” Nation said. “We are taking less now for them to expand. (The opposition to the ITEP) is hypocrisy and it’s hysteria.”
In addition to Nation, board members voting for the tax break were Elizabeth Heintz, Michael Dirmann, Jack Loup, Brandon Harrell, Sharon Drucker, Ronald Bettencourtt and Rickey Hursey.
As one of the main recipients of tax money in the parish, the School Board has the authority to consider the exemptions under new rules for ITEPs. They don't have to weigh in at all, but if they wish, they can say yes or no to the companies' requests.
Diversified is the exclusive supplier to Popeyes restaurants through 2034, which has sparked further expansion plans. Smith hinted on April 4 of an $80 million acquisition in a year or two that would make its current tax contribution to the School Board seem small.
The 10-year tax break that Diversified Foods received Thursday will allow it to pay property taxes on only 20 percent of the $15.5 million expansion.
The school board approved two other ITEP applications on Thursday. Dependable Glass Works of Covington and Mechanical Equipment Co. Inc. near Mandeville received tax breaks on smaller investments. The totals were $539,000 and $300,000, respectively.
The tax program allows manufacturing concerns to get an exemption on 80 percent of their local property tax bills. The idea is that businesses can use the savings in tax dollars to invest in growth, which ultimately could mean more money for taxing authorities.
The School Board is the largest tax recipient body in the parish, currently receiving 65.41 mills, which generates about $132 million in revenue annually, according to the St. Tammany Parish Assessor's Office website.
That millage rate is changing, however, as the school board unanimously agreed to levy a 62.41 millage rate in 2019. Operating costs consume 34.03 mills of that total, while bond and debt service is the second highest total at 13.90 mills.
The board also unanimously voted on a resolution to support the adoption of the minimum foundation program approved by the Louisiana BESE Board for the 2019-20 school year.