BATON ROUGE, La. (AP) – A bid to lessen the local government influence that Gov. John Bel Edwards added to a lucrative Louisiana property tax break program for manufacturers narrowly advanced Monday to the full House for debate.
The 80-year-old Industrial Tax Exemption Program, which gives approved manufacturing facilities an exemption from paying local property taxes for up to 10 years, has become a flashpoint in disagreements between the Democratic governor and business groups.
The House commerce committee voted 8-7 to send a proposal, by Republican Rep. Rick Edmonds of Baton Rouge, to reduce local government decision-making in the awarding of the tax breaks to the House floor.
Edwards opposes the measure, which is backed by the Louisiana Association of Business and Industry and the Louisiana Chemical Association.
After taking office in 2016, Edwards tied the property tax breaks to job creation and retention and gave local government a say in whether exemptions are issued, amid criticism that the program represented a corporate giveaway.
New applicants can receive up to an 80 percent exemption from property taxes for two five-year terms. Parish councils, police juries, sheriffs and school boards help determine the fate of tax breaks since the lost property tax dollars would otherwise flow to their coffers for operations.
Business groups have criticized the local approval process as confusing, complicated and damaging to economic development in a state with an already difficult-to-navigate tax structure.
Edmonds’ legislation would create a three-person board – including the sheriff, school board president and head of the municipal authority – to review tax break applications, rather than the larger local government bodies.
Edmonds said the change would streamline the approval process and ensure that local government officials have a voice.
“I don’t want to see us not be a business friendly state,” he said.
Opponents, including the associations representing police juries and school boards, said the newly created review boards would not offer enough local input. Some lawmakers who voted against the legislation said having three people decide would not adequately represent diverging viewpoints on school boards and parish councils.
“My constituents back home want a bigger voice,” said Sulphur Rep. Stuart Moss, a Republican whose region of the state has many of the high-dollar industrial projects that have received the property tax breaks.
Edwards’ chief lawyer, Matthew Block, said since Edwards’ changes and the local approval process went into effect, most applications still have received approval. The Edwards administration says 39 other states have similar property tax exemption programs requiring local resolutions of support.
Amid concern the new review boards created under Edmonds’ legislation would circumvent Louisiana’s open meetings law, Republican Rep. Stephanie Hilferty of New Orleans added a requirement that the three-person body hold a public meeting to make its recommendation on a tax break application.