Together Baton Rouge began circulating an online petition Monday night calling for the Metro Council, school board and sheriff to deny ExxonMobil’s upcoming Industrial Tax Exemption applications for projects the company already completed.
As of this afternoon, the petition has garnered nearly 350 signatures. The group says its issue with Exxon’s ITEP requests is that the property tax breaks are supposed to provide an incentive to invest, but Exxon’s project investments in question had already been made.
“For so long, they’ve been getting these exemptions over and over,” says Together Baton Rouge volunteer leader Dianne Hanley. “We started looking more closely at what the program was trying to achieve—to incentivize investment. But they are asking for incentives for things they’ve already done.”
As Exxon explained last week, however, the company’s investment decisions for three projects, associated with the ITEP requests, were made while the ITEP rules were being revised in 2016 after Gov. John Bel Edwards’ executive order. Like other companies, Exxon waited until after the new rules were adopted before moving forward with its ITEP applications for the projects, says spokeswoman Stephanie Cargile.
Exxon has taken the same steps as other companies with ITEP applications related to completed investments, she adds. Georgia Pacific had a similar ITEP request recently approved without objection.
“By singling out ExxonMobil despite hundreds of other companies filing applications, this group is not only maligning the largest corporate investor of East Baton Rouge Schools, but they are also sending a strong anti-business message to our corporation,” Cargile says in a statement.
The state Board of Commerce and Industry approved Exxon’s three ITEP requests on Friday—two in East Baton Rouge and one in West Baton Rouge. The requests will now go before local government entities in the two parishes.
In response to Together Baton Rouge’s criticism, Louisiana Economic Development Secretary Don Pierson says no tax breaks are granted after the fact, but it’s important to consider ITEP rule changes before and after the governor’s 2016 executive order.
Under the former rules, companies had to provide advanced notice to the state of their investments and, if the projects were in compliance with the rules, companies could proceed with the expectation that the tax break would be provided, Pierson says. When the project was completed and the final cost was known, the BC&I would grant final ITEP approval.
Under the new rules, companies are still required to provide notice to the state and then enter into a cooperative endeavor agreement, with clearly defined investment and job numbers, which goes before the BC&I and then local entities for approval—before a project is completed, Pierson says.
It’s easy to see why the process can be confusing, he says, while still maintaining that the state follows the rules.
“Tax abatements are strictly administered according to laws and rules of the program,” Pierson says. “In all cases, in order to qualify for exemptions, the company would negotiate with the state and provide notice. No tax abatement is granted after the fact.”
(Note: Manny Fajardo, an advertising account executive for 225 Magazine and the brother of Louisiana Business Inc. President and CEO Julio Melara, serves on the Louisiana Board of Commerce and Industry Board, which considers all ITEP applications.)