ITEP negotiations going on behind the scenes in advance of Thursday vote
Mayor Sharon Weston Broome’s Chief Administrative Officer Darryl Gissel was planning to meet today with officials from the Baton Rouge Area Chamber to try to hammer out a compromise over a set of criteria for awarding property tax abatements in East Baton Rouge Parish under the state’s Industrial Tax Exemption Program, or ITEP.
The behind-the-scenes gathering comes two days before the scheduled meeting of a committee established by Broome in 2017 to come up with guidelines the three taxing authorities in the parish—the school board, sheriff’s office and Metro Council—can follow when deciding whether to grant ITEP tax breaks to manufacturers.
The committee last met in late March and vowed then to finalize its recommendations April 12. It is unclear how much progress has been made to date.
“We’re working with everybody hoping between now and Thursday to come up with something that works,” says Gissel, who represents the mayor’s office on the committee. “We want to incentivize industry but we want to protect the taxpayer and the interest of the taxing authorities.”
Currently, three proposals are on the table. One, by Metro Council member Matt Watson and school board member Mike Gaudet, would make it relatively easy for manufacturers to qualify for tax abatements. Another, by Metro Council member LaMont Cole, would seriously curtail the number of incentive manufacturers could receive. A third proposal, by Gissel, comes down somewhere in the middle, but has come under fire by some for trying to calculate the return on investment a taxing authority could expect to see for awarding an ITEP incentive.
The Watson/Gaudet and Gissel proposals have enjoyed the most support among the business community and the committee members, but the ROI issue is a sticking point for some.
Complicating the dynamic is new information released Monday by the community organization Together Baton Rouge, which has been pushing aggressively to scale back ITEP abatements in order to funnel more money to local governments for education and social services.
At a press conference Monday night with representatives from local teachers unions, TBR suggested if all the applications currently in the pipeline are granted in full, East Baton Rouge Parish will lose out on $11 million in tax revenue in one year and more than $71 million over eight years. TBR’s figures assume all projects in Baton Rouge currently applying for ITEP will happen regardless of whether or not the tax break is awarded.
While the local ITEP committee has been working on the issue for the past few months, frustration among some in the business community has grown at the slow pace of progress. Adding to the sense of urgency to get something done is the specter of a major capital investment by ExxonMobil, which has suggested it won’t do the project if the ITEP rules are not hammered out favorably and soon.
But Robert Adley, Gov. John Bel Edwards’ representative on the state Board of Commerce and Industry, which ultimately must approve ITEP applications, says East Baton Rouge Parish is going about the process the right way and isn’t lagging behind most other parishes.
“Many local taxing authorities are trying to figure out guidelines to follow in making their decisions,” Adley says. “This is not a decision they’ve had to deal with since the 1930s so if it takes a little time for them to get through it I don’t see that particularly as a problem.”