Lackluster interest from industry plays role in failure of Amendment 5

    Some Louisiana voters might have been surprised to learn Tuesday night that proposed Constitutional Amendment No. 5—which, at least on paper, was widely supported by high-powered industry groups—was defeated, 37% to 63%, with more than 1.2 million people voting against the measure statewide.

    Less surprised, however, are the industry leaders, good government groups and pro-business organizations that quietly endorsed the proposal, which would’ve allowed manufacturing entities to negotiate their existing property taxes by meeting privately with local governments so that, for instance, companies could make upfront payments to local governments in exchange for a long-term tax reduction. 

    As the legislation was being drafted, Louisiana Mid-Continent Oil & Gas Association President Tyler Gray says his organization pushed for two statutory companion bills over the two special sessions: HB28 in the first and HB78 in the second. But both died in the state Senate, resulting in amendment language that oil and gas companies found unsatisfactory.

    “We had lackluster interest from membership,” Gray says, noting the companion bills would’ve mandated each agreement include a single point of contact, no required transfer of property and clearer investment financials. “We’re working on a more comprehensive and clearly defined program-type effort for a future legislative session, most likely in the spring.”

    At the same time, there was a large anti-amendment sentiment. The Louisiana Taxpayer Education Fund, a political action committee affiliated with the Louisiana Association of Educators, raised some $923,000, which the group spent on television ads, digital ads and canvassing opposing the amendment, campaign finance reports show. Generally, opponents argued the measure would have created a potential $2.5 billion loophole in annual property taxes, which currently fund health care, education and public safety among other state services.

    Barry Erwin of the Council for a Better Louisiana, which endorsed the ballot item in an effort to “untie the hands of local governments that are in many cases limited by state restrictions,” says the relative obscurity of the proposal also likely made it a harder sell.

    “I don’t think it’s something that would’ve been used all the time,” Erwin says. “You would’ve seen it on an occasional basis, based on specific need or circumstance in a community. That might be another reason there wasn’t a big push.”

    Baton Rouge Area Chamber President and CEO Adam Knapp, whose organization endorsed the item because it mirrored best practices in other states, chalks up the item’s failure not only to a lack of excitement from Louisiana’s business and industry groups, but also to those groups allocating their time and resources elsewhere.

    “There was a lot more focus from industry on Amendment No. 2, and more resources went there,” Knapp says. “There was not an appetite for two big amendments—and there wasn’t a dramatic upswell of people trying to pass it anyway.”