Together Louisiana protests Industrial Tax Exemption Program changes

Together Louisiana this morning protested rule changes the Board of Commerce and Industry will consider making to the Industrial Tax Exemption Program, and called for stricter rules on the incentive from the governor.

Despite Gov. John Bel Edwards imposing new rules last year to rein in the ITEP, the state granted a record $4.9 billion to companies in 2016 through the incentive, according to an analysis from the nonprofit advocacy group.

Edwards’ executive order tied the program to job creation and gave local governments a say in whether or not to approve ITEP applications. The state grants companies up to 10 years of property tax exemptions for capital projects via ITEP.

Later the governor clarified the rules would only apply to new applicants, not renewals, siding with industry over Together Louisiana, which was pushing back against the provision but was ultimately okay with the reforms.

The group will testify at the meeting to oppose a rule change that would grant companies the tax exemption if they did not hear back from locals after four months. At a press conference at the LaSalle Building downtown this morning, the Rev. Lee Wesley also called for a “sunshine” provision whereby Louisiana Economic Development would post applications on its website.

“We want it to be an incentive program and not a corporate welfare program,” Wesley said.

LED, in a written response, says the fact that the state granted a large number of exemptions last year means the program is working like it is supposed to, attracting capital projects.

Since 2000, the state granted an average of $1.33 billion per year, according to Together Louisiana. The $4.9 billion approved last year represents 4.4 times the average.

“These are the big projects we’re seeing because we’re being successful and attracting these big capital projects,” said LED spokesman Gary Perilloux. “That’s what happens. That’s the program working the way it’s supposed to work.”

Perilloux said it is unclear why the spike in exemptions occurred this year. Several of the larger projects were in the pipeline before Edwards signed his executive order, meaning they rules did not apply to them.

LED has not published its final figures for the ITEP from 2016, but Perilloux said Together Louisiana’s figures are “in the ballpark.”

Together Louisiana organizer Broderick Bagert said the group will eventually ask for tighter rules on job creation, arguing companies are currently not being held to strict enough standards. He pointed to more than two dozen applications are up for renewal at today’s meeting.

Read the full report. 

—Sam Karlin

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