Gov. John Bel Edwards’ administration and Louisiana Economic Development are bringing a proposal Friday to the Board of Commerce and Industry that has the potential to dramatically change the state’s Industrial Tax Exemption Program.
The proposal gives a company whose request for a property tax abatement under ITEP has been rejected by a local government the right to appeal to BC&I, which can overturn the local decision.
According to language in the proposed resolution, a company “may appeal the rejection of an exemption by a local governing body after action by this Board approving the exemption in accordance with the ITEP rules upon grounds that the rejection is for reasons in conflict with the ITEP rules, including but not limited to alleging that a local governing body rejecting the exemption has guidelines that contradict the ITEP rules.”
The resolution comes as something of a surprise, given that it was the Edwards administration in 2017 that revamped the 85-year-old ITEP program, which, until then, had seen tax break applications overwhelmingly approved, exempting what local government officials say are badly needed revenues.
Because the initial rollout of the reforms was controversial, the administration went back and tweaked the program in 2018, addressing some of the problems it had inadvertently introduced with the 2017 reforms.
Since then, a surprising number of local governments have exercised their authority to reject exemptions, though most are still approved.
While today’s proposal appears to completely undermine the authority of local governments to reject ITEP incentives, a spokesman for Gov. John Bel Edwards says that is not the intention of the measure, which will likely be approved tomorrow by the BC&I.
“The locals still have a voice and will still have input,” says communications director Shauna Sanford. “They will still be able to share their thoughts on any of the requests … it is not weakening their input. It just adds clarity.”
But while the locals may still have a voice, that voice can be overruled, under the terms of this proposal, by BC&I. A statement issued by the community organization Together Louisiana, which helped champion the reforms three years ago, takes issue with the proposal.
“This resolution is asking the locals to trust an unelected state board with their money,” says Edgar Cage, an organizer with Together Louisiana. “BC&I and LED continue to violate the constitution and their own rules by not providing a thorough written analysis of the benefit to the ITEP. Together Louisiana believes in Local communities investing in their children and the future.”
BC&I meets at 9: 30 a.m. in the LaSalle Building, 617 North St.
