The Metro Council’s guidelines for approving ITEP requests will soon face its first test since new rules were adopted in late 2018.
An Industrial Tax Exemption Program request will be introduced at the council meeting this evening and is scheduled for a public hearing on June 12. The council adopted new ITEP guidelines in November but has not yet had to vote on any requests until now.
The tax break request is for an $8.5 million project at a company called Super Insulation in Baton Rouge, which is an affiliate of Lewco Specialty Products. The project creates six new jobs and 50 construction jobs, according to the ITEP application. If approved, the company would receive an estimated property tax exemption of $152,441 in the first year.
Under the council’s ITEP guidelines, projects must create at least 15 permanent full-time jobs or 10% of the company’s “pre-project employment” baseline.
Super Insulation should meet the job threshold because, according to its application, the company has 34 current employees, meaning six new jobs would be 18% of pre-project employment.
But there are other stipulations in the guidelines that ITEP requests must meet.
For instance, the guidelines mandate the council “shall not approve exemptions for capital expenditures deemed to be routine or not in a circumstance of a competitive site selection process, including any project on which construction has already been completed.”
The Super Insulation project is described in its application as “installing new machinery and equipment, along with some real property improvements to support the manufacture of a revolutionary, new insulation material that has been patented by the company.” Construction for the project is expected to wrap up June 30.
Previous ITEP requests from Georgia Pacific and ExxonMobil were supposed to go before the council in recent months, but both were pulled before a vote took place, meaning the Super Insulation request will be first to test out the guidelines.
Councilman LaMont Cole, who proposed the adopted ITEP guidelines, did not return requests for comment. Super Insulation also could not be reached by deadline.
Councilman Matt Watson also played a role in drafting ITEP guidelines, though the council ultimately adopted the rules offered by Cole.
“I think this is a wonderful project for our community that creates the jobs necessary to justify an ITEP exemption,” Watson says.
Together Baton Rouge, which fought for local input and stricter conditions for ITEP approval, supports projects that meet council guidelines, says TBR leader Edgar Cage, though he hasn’t had a chance to review the request yet.
“We aren’t opposed to ITEP—we’re just opposed to rubber stamping,” he says. “That’s why the criteria was established.”
In other news, Together Louisiana released a study today examining potential property tax reductions in each parish when ITEP property that is currently exempt under the 10-year program returns to the tax rolls after the exemption expires. The study, in reaching its eye-catching conclusions, assumes the taxing agencies receiving property tax dollars will not roll millage rates forward, as allowed under law. If an agency were to do so, it would reduce or eliminate the property tax savings the study proclaims. Read the study here.