$208M In Business Tax Break Applications Stalled By LA Gov.

Gov. John Bel Edwards

BATON ROUGE (AP) — An estimated $208 million in property tax breaks for businesses was stalled Thursday at the request of Gov. John Bel Edwards.

         The Board of Commerce and Industry agreed, in a 14-2 vote, to delay a decision on 305 applications for the Industrial Tax Exemption Program until next month.

         New and expanding manufacturing facilities are allowed, under the state constitution, an exemption from paying local property taxes for up to 10 years. The Board of Commerce and Industry and the governor must sign off on the exemptions.

         Edwards spokesman Richard Carbo said the Democratic governor and his economic development secretary are devising new rules for reviewing such exemption requests.

         "The governor does have final approval. However, given the volume of contracts to be considered and his intentions to reevaluate how these are awarded, the governor requested additional time to consult with the secretary of (Louisiana Economic Development) on changes to the process," Carbo said in an email.

         The tax breaks siphon dollars away from local governments and public schools that use the property tax revenue to pay for their own operations.

         The list of delayed tax breaks are for more than $1.3 billion in manufacturing projects throughout Louisiana, like at the BASF chemical plant in Ascension Parish, the CITGO refinery in Calcasieu Parish and Cleco Power and Entergy Louisiana projects across several parishes. Coca-Cola, Dow Chemical and Utz Quality Foods also were on the list.

         Rep. Thomas Carmody, R-Shreveport, was one of the two votes in opposition to the delay. It was his first meeting as a member of the board. He said he hadn't heard from the governor's office ahead of time about the request to stall the applications and said he worried about the implications of the postponement.

         He said businesses on the list appeared to have already spent the money and made the manufacturing investments required to receive the tax break.

         "My concern was that, if indeed what we were going to do was now change the application process, that would certainly jeopardize the financial game plans of these businesses based on what incentives were being presented to them," Carmody, a commercial real estate broker, said after the meeting.

         The projects were estimated to create 760 permanent jobs. The tax exemption would equal nearly $274,000 for each permanent job.

         Carmody said he's reached out to the governor to talk to him about his concerns about the delay. Re-evaluating the process for handling the industrial tax exemptions, Carmody said, "sends a chilling signal to the projects."

         Edwards, in office in January, has said government has been too generous in its tax break programs for businesses. He's said tighter controls should be put in place and more analysis about the benefits versus costs should be done for the projects that receive tax breaks and the tax break programs themselves.

         The property tax breaks are slated to come up again at the Board of Commerce and Industry's June 24 meeting.

         – by AP Reporter Melinda Deslatte



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