An estimated $208 million in property tax breaks for businesses was stalled Thursday at the request of Gov. John Bel Edwards.
The Associated Press reports the Board of Commerce and Industry agreed, in a 14-2 vote, to delay a decision on 305 applications for the Industrial Tax Exemption Program until next month.
New and expanding manufacturing facilities are allowed, under the state constitution, an exemption from paying local property taxes for up to 10 years. The Board of Commerce and Industry and the governor must sign off on the exemptions.
Edwards spokesman Richard Carbo says the Democratic governor and his economic development secretary are devising new rules for reviewing such exemption requests.
“The governor does have final approval. However, given the volume of contracts to be considered and his intentions to reevaluate how these are awarded, the governor requested additional time to consult with the secretary of (Louisiana Economic Development) on changes to the process,” Carbo tells the AP in an email.
The tax breaks siphon dollars away from local governments and public schools that use the property tax revenue to pay for their own operations.
The list of delayed tax breaks are for more than $1.3 billion in manufacturing projects throughout Louisiana, like at the BASF chemical plant in Ascension Parish, the CITGO refinery in Calcasieu Parish and Cleco Power and Entergy Louisiana projects across several parishes. Coca-Cola, Dow Chemical and Utz Quality Foods also were on the list.
Rep. Thomas Carmody, R-Shreveport, one of the two votes in opposition to the delay, said businesses on the list appeared to have already spent the money and made the manufacturing investments required to receive the tax break.
“My concern was that, if indeed what we were going to do was now change the application process, that would certainly jeopardize the financial game plans of these businesses based on what incentives were being presented to them,” Carmody, a commercial real estate broker, said after the meeting.
The projects were estimated to create 760 permanent jobs. The tax exemption would equal nearly $274,000 for each permanent job. The property tax breaks are slated to come up again at the Board of Commerce and Industry’s June 24 meeting.
