Industrial tax breaks subject of first policy debates in governor’s race

Candidates for governor criticize Edwards for ITEP decision

BATON ROUGE, LA (WAFB) - Gubernatorial candidates are drawing some of the first battle lines ahead of November’s election. Republican challengers, Eddie Rispone and U.S. Rep. Ralph Abraham, have each criticized Governor John Bel Edwards for his executive order that changed the way the Industrial Tax Exemption Program (ITEP) is administered.

Before Edwards' policy change, the Louisiana State Board of Commerce and Industry had sole authority over whether industry giants' local property taxes would be forgiven. Edwards reined in the program and gave local schools, law enforcement, and parish governments some say in the matter because those entities stand to lose out on funding if property taxes are forgiven.

Last month, the East Baton Rouge Parish School Board voted down a tax break for work Exxon had already completed in 2017. The decision sparked dramatic debate in Baton Rouge that would eventually prompt Mayor-President Sharon Weston Broome to hold a public meeting with the city’s business leaders to express their support for ExxonMobil.

RELATED: Mayor, business leaders reaffirm support for Exxon amid ITEP debate

Following the school board’s decision, Rispone wrote in The Hayride, a conservative newsletter, that the change threw the state’s economy “into chaos” without considering consequences. Abraham told the USA Today network the changes “have made the benefits of doing business in Louisiana more uncertain.”

Edwards stood by his decision.

“For many years, when it came to ITEP, we were the only state where local governments didn’t have a say in how their tax dollars were collected, and my executive order fixed that," Edwards wrote in a statement. “Louisiana continues to have one of the most generous ITEP exemptions because we know ITEP creates shared value for our manufacturers and our local communities — to grow together, with a certain path for the future.”

The school board handed Exxon a rare defeat, and the company hinted they could locate a proposed expansion outside of East Baton Rouge Parish the following day. That local concern encouraged statewide fear that Exxon and other industry giants could leave for other states, primarily Texas.

At least one school board member said she voted against the exemption because the expansion the exemption is supposed to encourage had already been completed. The school board’s attorney said the board considers each application on an individual basis, adding he does not think the vote represents a shift in support against ITEP or Exxon.

Exxon representatives told the state board of commerce they waited to request the tax break until 2018 as a show of good faith so the local entities would have the opportunity to vote after the governor’s ITEP policy change in 2016.

“I would love it if this doesn’t become a political football,” said Louisiana Association for Business and Industry President Stephen Waguespack at the Baton Rouge Press Club Monday. “I would love it if we could find some kind of compromise.”

Waguespack criticized the change for creating “local chaos” instead of local control. He said he would prefer a system in which each parish designates a single office or person to vote on ITEP, rather than creating a “gauntlet” of three or four entities that each have a say.

“As long as it’s in this broken posture, can you blame any candidate for talking about it?” he asked. “I hope this doesn’t turn into a political issue, but it’s an election year and there’s always that risk. The sooner we get to that resolution, the more we can avoid this happening.”

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