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Another day, another debate over Louisiana’s proposed ITEP changes

Industry advocates were out in force today to support the state’s proposed changes to the embattled Industrial Tax Exemption Program, while opponents urged officials to slow down and clear up ambiguities surrounding how the lucrative tax breaks will be awarded.

In a nearly two-hour public hearing before the Louisiana Board of Commerce and Industry this morning, about 20 stakeholders spoke in support, voiced concerns or suggested changes to the state’s newly proposed ITEP rules.

The vast majority of those speaking were industry representatives who said they support the revamped measure, though making clear they were not getting everything they wanted.

“These changes will improve the way the program operates and make it more attractive to certain industries,” said Jim Patterson, LABI vice president of government relations. “There is a desire for more change. We look forward to continue working to improve the program to make it more palatable.”

The state’s proposed changes would cap ITEP incentives at 80% for 10 years, enabling local governments to collect some property tax revenues the first year a manufacturer is in operation. They also simplify and standardize applications for ITEP and give the state the authority to evaluate and conditionally approve exemptions. Local governing bodies would still have the right to veto them.

Essentially the meeting was a repeat of arguments those on both sides of the ITEP issue have been making for months. The only new twist today was the introduction of storybook comparisons, with opponents claiming ITEP is a story akin to “The Emperor’s New Clothes,” while supporters cited an idiom from one of Aesop’s fables, warning not to “kill the goose that laid the golden eggs.”

In short, Dianne Hanley, a member of Together Baton Rouge, said the benefits touted by ITEP are exaggerated, adding citizens are waking up to say the emperor has no clothes.

An ExxonMobil representative stood up toward the end of the hearing to refute ITEP opposition as “disingenuous.” ExxonMobil spokesman Jeff Copeskey said business and industry pay 50% of all state sales taxes, which was one of a number of positive industry stats the Greater Baton Rouge Industry Alliance gave out on pamphlets at the hearing. He then took aim at the emperor analogy.

“I have another parable,” Copeskey said. “Killing the goose that lays the golden eggs.”

There was a sense of urgency  to implement rules as soon as possible, amid concerns that prolonged ITEP uncertainty could drive away business. ExxonMobil representatives repeatedly mentioned the oil giant is considering Baton Rouge for a major expansion along the Gulf Coast, and the future of ITEP could play a part in bringing it here.

But implementing vague rules might only push ITEP into further uncertainty, argued Broderick Bagert, lead organizer for Together Baton Rouge. Bagert questioned how the rules would measure job creation and return on investment in awarding property tax breaks to manufacturers. Short-term contract jobs should not be equivalent to long-term jobs, Bagert said, and ITEP should require an ROI analysis, not an “eyeballed” estimate by LED officials.

The head of the Louisiana Association of Educators also asked the board to consider negative impacts ITEP has had on school districts.

LAE President Debbie Meaux said Louisiana loses “much needed tax money to companies wealthier and better off than our school districts” and requested school boards be removed from ITEP completely.

 

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