More than half the manufacturers that asked the Louisiana Board of Commerce and Industry today to renew their industrial tax exemption for a second, five-year period actually cut more jobs than they created during the previous five years, according to data presented to the board by the nonprofit group Together Louisiana.
What’s more, only three out of the 22 companies seeking a renewal of the state’s generous incentive program fulfilled the job creation claim they had made to the state when they applied for the exemption.
“Whether a company creates the number of jobs they said they would has to be a criteria for whether you give a company a renewal,” Broderick Bagert, director of Together Louisiana and its affiliate organization Together Baton Rouge, told the board at its meeting today. “Otherwise, they are gaming the state.”
Actually, job creation was not specifically a requirement of the Industrial Tax Exemption Program, or ITEP, when the companies currently seeking renewal originally applied for the incentive in 2011. But earlier this year, in an effort to crack down on the billions in tax breaks the program is giving to big industry, Gov. John Bel Edwards signed an executive order tying ITEP to new job creation. The order also gives local governments a greater say in whether to grant the exemptions to companies located in their districts.
Today’s meeting was just the third since the governor’s order went into effect, and it’s clear the board, of which many of the members are newly appointed by the governor, is still trying to figure out how to implement the changes the administration wants for a system that has been in place and heavily favored big business for decades.
Together Louisiana, at a press conference prior to the meeting, urged the board to immediately implement the governor’s order, which was signed in late June, arguing that local governments need a greater share of the property tax revenues from the plants located in their areas—especially in light of the recent flood.
Later during the meeting, board member Robert Adley, the governor’s appointee to the board, said those changes are coming. But because of legal and contractual issues the board has to proceed carefully.
“Everybody needs to understand we support what you want to do,” he told Bagert. “But 1936—that is when this mess we find ourselves in started—and it has been running like a choo choo train ever since. … Change is coming, but there are issues we need to work through.”
Against the larger issue about changes to the way the exemptions are granted and renewed, the board today largely deferred votes on granting new industrial tax exemptions and renewing existing ones. In some cases the board wanted more data from the applicants. In other cases, it is waiting on clarification from the governor’s office, specifically, for instance, on whether the executive order covers ITEP renewals.
An attorney for Louisiana Economic Development, Richard House, told the committee it did not. But others on the board weren’t so sure. Adley said the governor’s office will be forthcoming with its intent in the coming days. Until then, the board voted to defer taking action until next month.
—Stephanie Riegel
