Louisiana Senate rejects permanent local say for industrial tax breaks

The relatively new voice local taxing bodies have over whether industrial projects receive major tax breaks could soon fade after the Louisiana Senate rejected an attempt Tuesday to make their say permanent. Gov. John Bel Edwards issued an executive order six years ago that gave locals the right to approve or reject their share of the Industrial Tax Exemption Program (ITEP), and a proposed amendment to bake that change into the state constitution failed to gain the support it needed.

Lawmakers in the upper chamber rejected Senate Bill 151 from Sen. J. Rogers Pope, R-Denham Springs, in a 14-21 vote. It would have allowed voters statewide to decide whether sheriffs, school boards and parish councils would retain their authority over ITEP, which forgives up to 80% of property taxes owed on large-scale business investments.

According to statistics Pope shared with senators, 96% of projects seeking the ITEP incentive have been partially approved at the local level and 84% have been fully approved.

“That tells me all the locals want the business. Nobody’s trying to drive business out of the country,” Pope said on the Senate floor.

Proponents of  Pope’s proposal argued it was essential because the next governor, likely to be a Republican, would remove Edwards’ order and restore the ITEP break back to 100% of local property taxes.

Sen. Jay Luneau, D-Alexandria, supported the bill and noted Louisiana was the only state that allows a non-elected body, the State Board of Commerce and Industry, waive local property taxes to the extent the Industrial Tax Exemption Program does.

Opponents included Sen. Bret Allan, R-Franklin, who said that a change made to it last month gives too much negotiation power over tax breaks to local officials. Reform of local taxes is needed before any Industrial Tax Exemption Program adjustments are made, he said.

Sen. Jay Morris, R-West Monroe, said making the ITEP changes permanent would send Louisiana’s “economic development efforts into chaos.” He had suggested a compromise that would give local taxing bodies control of a portion of the property taxes due to them, but Morris’ amendment to do so failed when Pope’s bill was on the Senate floor in late April.

Morris said forces conspired against his amendment because they want to see ITEP returned to its full exemption status after Edwards leaves the governor’s seat in two years.

“They didn’t want to this bill to have a chance at that compromise,” Morris said.