Lawmakers Plan Legislation to Return Tax Break Authority to the State

Louisiana state Rep. Franklin Foil and state Sen. Bodi White
Louisiana state Rep. Franklin Foil and state Sen. Bodi White
January 31, 2019

Two Baton Rouge-area legislators on Monday announced plans to file a bill returning full authority for the state’s industrial property tax exemption program to the state.

In a joint statement, State Sen. Bodi White and State Rep. Franklin Foil, both Republicans, reference a recent decision by the East Baton Rouge Parish School Board to reject two tax break applications by ExxonMobil.

"The decision by EBR School Board to remove ITEP incentives from ExxonMobil is one of the most short-[sighted] actions I have ever seen from an elected body," White says in the prepared statement. "ExxonMobil employs nearly 7,000 people locally and pours hundreds of millions of dollars into our economy every year. We have to take action."

"For Louisiana to continue to grow and compete we have to show consistency and give business and industry the confidence that we’re not going to keep changing the rules" Foil says. "The impact this could have on our city, parish, and state could be catastrophic unless we take immediate action."

For decades, a state board awarded exemptions from local property taxes to owners of manufacturing projects with no input from local officials. Gov. John Bel Edwards, a Democrat, gave local tax collectors a say in the process.

Asked last week about the East Baton Rouge Parish school board’s decision to reject ExxonMobil’s ITEP applications, Gov. Edwards said he wouldn’t necessarily have made the same decision but reiterated his belief that local elected officials should control local property taxes.

"These are some of the most generous incentives in the country," Edwards said. "With the school system of Baton Rouge, if you believe in representative democracy, [the school board] ought to make decisions about funding that’s available for education in Baton Rouge."

ExxonMobil says it will no longer take the ITEP into account when it makes project investment decisions, which potentially could make Louisiana less competitive for those investments.

In a full-page ad in Sunday’s edition of The Advocate newspaper, the Baton Rouge Area Chamber says the tax break helps alleviate disadvantages caused by the state’s "overly complicated and burdensome business tax structure." The chamber blamed a "small, angry group" for vilifying ExxonMobil and urged local governments to "follow dispassionate, predictable processes."

Together Baton Rouge, which has urged greater scrutiny of the property tax breaks, says it supports standards set by the school board and East Baton Rouge Metro Council requiring job creation and prohibiting exemptions on already-completed projects. ExxonMobil’s proposed expansion of its polyolefins plant meets those standards and was approved for an ITEP late last year with no objection from Together Baton Rouge, the activists say.

White and Foil say they are working out the details of their bill and expect to complete the final version in the coming weeks. The legislature’s regular session begins April 8.