BATON ROUGE, LA (WAFB) - Baton Rouge area legislators are drafting a bill that would return the state’s authority over the Louisiana Industrial Ad Valorem Tax Exemption (ITEP), according to a Monday release.
Senator Bodi White and Representative Franklin Foil announced their intention to file their bill in the upcoming legislative session. The lawmakers said the legislation would aim to create a consistent process for businesses applying for ITEP tax incentives.
The announcement came after the ExxonMobil, the state’s largest tax payer, decided to withdraw its 2017 ITEP requests from the metro council and the East Baton Rouge Parish Sheriff’s Office, who were set to vote on them during its January 23rd meeting. According to a release from the company, ExxonMobil says the “ongoing uncertainty” involving ITEP in Baton Rouge is the reason for the withdrawal.
"The decision by the EBR School Board to remove ITEP incentives from ExxonMobil is one of the most short-sided actions I have ever seen from an elected body ", said Senator White in a prepared statement. “ExxonMobil directly employs nearly 7,000 people locally and pours hundreds of millions of dollars into our economy every year. We have to do something.”
“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,” according to Foil. “The impact this could have on our city, parish, and state could be catastrophic unless we take immediate action.”
White said he and Representative Foil are working through the bill’s details, and that they hope to have a final version in the coming weeks.
Ahead of the draft’s announcement, the Baton Rouge Area Chamber released a statement on Sunday, expressing its deep concern for the withdrawals' effects on the Baton Rouge manufacturing industry.
The East Baton Rouge School Board rejected ITEP requests on January 19, after nearly three hours of debate. The rejection is the first time the board rejected an exemption since the governor granted local entities some say in the matter with a 2016 executive order.
In December, ExxonMobil had delayed its exemption, worth about $2 million over ten years, for work done in 2017. Company representatives paused the process so local groups had time to to approve the request after the Edward’s rule change.
However, critics of ITEP, including the outspoken Together Baton Rouge organization, argue that the money should be invested into local schools, law enforcement and infrastructure instead of given to massive corporations.
Before its move to withdraw its ITEP applications, ExxonMobil was planning to expand its operations in south Louisiana with a proposed $1 billion polyolefins plant.