As last week began, three East Baton Rouge Parish taxing authorities and key stakeholders appeared to be well down the path of compromise in determining the criteria for awarding property tax breaks to manufacturers under the state’s Industrial Tax Exemption Program, or ITEP.
For months, the parties—like others across Louisiana—struggled to cobble together guidelines for recommending the property tax abatement. An advisory panel created by Mayor Sharon Weston Broome hoped to finalize its work for Baton Rouge by April 12.
That light at the end of the tunnel last week turned out to be the Edwards administration, with Gov. John Bel Edwards acknowledging his working behind the scenes to tamp down the confusion that’s reigned since his 2016 executive order gave parishes the power to decide when to award ITEP to manufacturers.
On Wednesday, Louisiana Economic Development Secretary Don Pierson unveiled the proposed rules—devised with input from various stakeholders—for the ITEP Program to the Louisiana Board of Commerce and Industry.
The rules include:
- Giving the state the power to evaluate ITEP applications and recommend approval of property tax abatements under the program before local governments get involved.
- Permitting applications to go before local governments for an up or down vote only after the state Board of Commerce and Industry gives preliminary approval.
- Allowing the tax abatement to automatically go into effect for 10 years if a local government takes no action on an ITEP application after 30 days.
- Capping the tax break at 80% of a manufacturer’s property tax bill for 10 years to enable local government to collect some property tax revenues during the first year of a manufacturer’s operations.
- Simplifying ITEP applications to clearly spell out the size of a manufacturer’s capital investment, how many jobs it will create and the size of its payroll, among other things.
Pierson told Daily Report the proposed rule changes were devised with input from business and industry groups, local governments, assessors, union representatives and community groups like Together Louisiana. “Each entity can see some real benefits to these proposed changes,” he said.
While there’s no visible opposition yet, some say the changes are being pushed through too quickly. “It seems like they’re trying to push it through without having it fully vetted,” says Together Baton Rouge leader Edgar Cage told Daily Report. Cage acknowledges his group was at the table when the new rules were crafted, but he said everyone one meet separately with the state. “You need to have a community dialog with everyone in the same room because that’s when everything comes out.”
The board is set to discuss the rule at its May 22 meeting, at which time public comment will be allowed. A tentative vote is scheduled for June 27.
