The Commerce and Industry Board, which oversees the state’s industrial tax exemption program, is scheduled to consider at its meeting today the renewal of more than $11 billion worth of tax exemptions to large manufacturers around the state.
But at a press conference this morning, a group of faith-based and community leaders urged the board not to grant the renewals, saying such a move would fly in the face of an executive order signed earlier this summer by Gov. John Bel Edwards and would deprive local governments of badly needed tax revenue in the wake of last month’s devastating flood.
“It’s time for everybody to step up and help,” says Dianne Hanley, chairperson of Together Louisiana, which is spearheading the opposition. “Since the flood … it’s more important than ever that our local governmental entities have what they need.”
The Commerce and Industry Board, which, for decades, basically rubber stamped approvals and renewals of the state’s 10-year industrial tax exemption, came under scrutiny earlier this year by the Edwards administration, which said it was time to bring the generous incentive program more in line with those of other states.
A study earlier this year by Together Louisiana determined that the generous tax incentive program will cost local governments, school districts and law enforcement agencies more than $16.7 billion in tax revenue over the next 10 years.
On June 24, Edwards signed an executive order that contained two substantive changes to the long-running program: Local parish governments must have a seat at the table during discussions about exempting local property taxes—including how much would be exempted—and businesses must show job creation or job retention to merit the exemption.
But more than two months since the order was signed, it has yet to be implemented and there is some question as to whether the order should apply to renewals currently on the books or whether those renewals should be grandfathered in. Commerce and Industry Board member Robert Adley, the governor’s appointee to the board, says he will argue today to his fellow board members that the governor’s order should apply to renewals, a move that the 16 manufacturers applying for the renewals will oppose. But he concedes it’s a tricky legal issue.
“There are legal concerns and other concerns that the board is having to consider,” he says. “We are having to walk a very tight rope … but I agree this has become an entitlement program.”