Baton Rouge ITEP committee makes progress but puts off guidelines vote until April

The Business Report

An East Baton Rouge Parish advisory committee charged with devising guidelines for local taxing authorities to follow when evaluating applications for the Industrial Tax Exemption Program moved closer this morning to agreeing on a final set of criteria for awarding the lucrative incentive.

But the committee put off voting on the guidelines yet again because not all members were present for the meeting, which is required under the executive order that created the committee.

Instead, the committee members, who represent the school board, Metro Council, sheriff’s office and mayor’s office, agreed to get feedback from their respective bodies on two different but similar proposals favored by the committee. The hope, committee members say, is that they will reach enough of a consensus to vote on final guidelines at their next meeting, April 12.

“Our charge is take it back to our bodies and let them know what we’re doing,” says Chief Administrative Officer Darryl Gissel, who represents the mayor’s office on the committee.

Gissel has drafted one of the two proposals the committee seems to be favoring. Councilman Matt Watson and school board member Mike Gaudet have drafted the other. The Watson/Gaudet plan is more generous than Gissel’s in that it would allow a 100% exemption to eligible companies depending on the size of their capital investment. The Watson/Gaudet proposal also does not make new job creation a requisite for granting the abatement.

Gissel’s proposal, on the other hand, would cap the incentive at 80%, even for the first five years, and puts more emphasis on evaluating the return on investment a taxing authority would see within 10 years of granting the abatement. It also ties the incentive to some level of new job creation.

A third proposal—based strictly on job creation—put forth last week by councilman and committee member Lamont Cole did not have much support from the committee today.

Baton Rouge Area Chamber President and CEO Adam Knapp says the Gissel and Watson/Gaudet proposals are not that far apart, adding his organization is happy to see the committee working so closely to reach a consensus.

Still, even if a consensus is reached, there’s no guarantee the taxing authorities—especially the Metro Council and East Baton Rouge Parish School Board—will accept the agreed upon guidelines, a fact committee members acknowledged after today’s nearly two-hour hearing.

“We’re strictly an advisory group,” Gissel says. “They can take our recommendations or they can take our advice and throw it out the window.”

East Baton Rouge Parish is under increasing pressure to establish a criteria for ITEP abatements soon. Other neighboring parishes—Ascension, for one, which recently awarded an exemption to Methanex—are moving forward, posing a competitive threat to Baton Rouge, according to the business community.

Adding to the sense of urgency is ExxonMobil, which has suggested a major capital investment planned for its chemical plant here depends on when and if it gets an ITEP abatement.

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