A bipartisan group of lawmakers is planning to try for the third time in three years to pass a bill that would allow manufacturers to pay an up front set fee to local taxing authorities in lieu of their property taxes.
The payments instead of ad valorem taxes, or PILOT, would allow local governments to receive money early that can then be spent on roads, bridges, schools and other infrastructure needs.
“Basically, industry and local government representatives negotiate a deal for a period of years that would give industry a bigger break than they would receive from the Industrial Tax Exemption Program and give local government an income stream right away for whatever they want,” says lobbyist Tom Spradley, who is working on the bill with several legislators.
Spradley says it’s still unclear who will sponsor the bill and how the final language will read, but he expects the finished product to closely resemble a bill last year sponsored by Rep. Alan Seabaugh, R-Shreveport.
That bill passed in the House but was defeated in a Senate committee, largely because of concerns from assessors around the state. They argued the bill would allow each taxing district in a parish—of which there can be dozens—to cut its own deal with a manufacturer, thereby causing confusion and chaos. Together Louisiana also opposed the bill arguing that, much like the Industrial Tax Exemption Program, it amounts to “corporate welfare.”
But conservative advocates of the bill, who were joined in their support for the idea by Democratic Gov. John Bel Edwards, say PILOT represents a proverbial win-win, giving industry a fair, predictable liability that can be paid up front to a community, while also giving school boards, parish councils and other local governmental entities badly needed revenues in a state that has little money for capital expenditures.
“Local government gets an income stream from year one that hopefully creates an economic impact factor,” Spradley says. “We think this is a really progressive thing to do.”
As currently envisioned, the proposed legislation would include two measures: a Constitutional amendment that would have to be approved by voters and a simple statute giving local governments that authority to enter into such deals with manufacturers.
Spradley says lawmakers will plan to introduce the measures in the Senate first this year, since the House has already indicated broad support for the program.
—Stephanie Riegel
