BATON ROUGE — About $15 million in property tax breaks for manufacturing facilities were stalled Monday by a state board that reviews them, after Gov. John Bel Edwards said he wants the tax breaks tied to jobs.
Once seen as a rubber stamp on the tax breaks, the Board of Commerce and Industry deferred action on more than two dozen requests for the Industrial Tax Exemption Program.
In some instances, companies seeking the tax breaks can submit additional information to try to persuade the board. In others, the board is awaiting guidance from Edwards on how far he wants the new rules to go.
The governor announced in June that he was changing Louisiana’s approach to the tax exemption program created decades ago.
New and expanding manufacturing facilities are allowed an exemption from local property taxes for up to 10 years. The Board of Commerce and Industry and the governor must sign off on the exemptions, which strip millions of dollars annually from local government agencies such as school boards and police departments.
The tax break applications often received little scrutiny from the board or a governor. But Edwards issued an executive order spelling out that he intends to tie the tax breaks to job creation and retention and to involve local government agencies in the decisions.
Monday’s Board of Commerce and Industry meeting was the first since Edwards issued the order, which business organizations have warned could cause uncertainty and disrupt pending manufacturing projects.
The board stopped most of the applications before it from moving forward, approving only a handful whose paperwork had been filed before the June 24 executive order.
Representatives of companies whose tax break requests were deferred talked of the value of the new facilities, add-ons and upgrades to chemical plants and other manufacturing sites. They said the tax breaks helped keep jobs at their facilities and keep the sites operating.
A group of faith-based and community leaders known as Together Louisiana pushed for more scrutiny of tax break applications, saying severe flooding in mid-August devastated public schools, police property and other public facilities that need tax revenue for recovery.
“This is a new day, and we’re under a disaster,” said the organization’s Dianne Hanley.
Robert Adley, a board member representing the governor, said many of the applications for tax breaks were “not pretty to me,” with millions in exemptions proposed for companies that don’t indicate their projects would create any new jobs.
For example, a Cleco Power LLC tax break application that received approval because it had been in the pipeline before Edwards’ executive order will give the company more than $12 million in tax breaks over 10 years for a project expected to create 12 jobs in St. Mary Parish.
“At some point we have to stop this process of a million dollars per job,” Adley said.