Louisiana Board Approves Tweak for Industrial Tax Break
NEW ORLEANS – The Louisiana board that oversees the state’s industrial property tax incentive program on Friday approved a rules change sought by business groups but opposed by some local officials and activists.
Manufacturing companies that want the tax break, known as ITEP, need approval from local governments that would otherwise receive the property tax revenue. The Louisiana Board of Commerce and Industry and the governor also must sign off.
Gov. John Bel Edwards proposed a change that would allow companies denied by local entities to appeal to the state board if the local denial was based on local rules that conflict with the state’s rules.
The program operated for decades with little to no input from local governments, even though local property tax revenue was at stake. Edwards issued an executive order in 2016 allowing for local input, which business advocates say has made the program less predictable and therefore less useful to a company trying to decide whether to invest or expand in Louisiana.
Representatives of Together Louisiana, a left-leaning community group that often argues the program is too generous, described the proposed change as one that would reduce local governments’ newfound control over local revenue. The group argues the tax break should only be given when new jobs are created.
“This is a move backwards in reform efforts that we have worked on together,” Edgar Cage with Together Louisiana said.
But Matthew Block, Edwards’ executive counsel, said local government entities would retain their ability to veto the tax breaks. The change would allow companies to appeal only when the locals establish rules that conflict with state rules, he said.
For example, in some parishes rules have been adopted that ban ITEP benefits for projects that are under construction or have been completed. The state board does not have that rule.
According to Block, a local school board (for example) still could vote down an ITEP request for that reason. But if it codifies that principle in a rule, a denied company would have the basis to appeal to the state board.
Representatives of the regional economic development chambers based in New Orleans and Baton Rouge spoke in favor of the change. They said dealing with separate sets of state and local rules creates confusion for companies.
“ITEP has historically been a factor in their investment decisions,” Ileana Ledet with Greater New Orleans, Inc. said. “We want to continue to see local input, but we’d also like to see some stability in the program, and we believe that’s what this resolution does.
By David Jacobs of the Center Square