The Business Report
An East Baton Rouge Parish committee hopes to finalize rules Monday that will determine the amount of property tax abatements eligible manufacturers can expect to receive under the state’s Industrial Tax Exemption Program, or ITEP.
On the agenda for Monday’s scheduled meeting are three different proposals that vary in their approach to the incentive program, which has undergone a sea change since Gov. John Bel Edwards in 2016 granted local governments greater authority in deciding whether to award ITEP tax breaks.
On one end of the spectrum is Metro Councilman Matt Watson’s proposal, which closely mirrors a set of criteria proposed earlier this month by the Baton Rouge Area Chamber. It would grant exemptions for manufacturers that make capital investments or create new job creation does not require they do both. Unlike BRAC’s proposal, however, it incentivizes new manufacturers to come into the market, and also those that invest in environmentally friendly technology and upgrades.
On the other end of the spectrum is Metro Councilman Lamont Cole’s proposal, which is more akin to a proposal being pushed by the community group Together Baton Rouge. Cole’s suggested criteria ties ITEP incentives directly to new job creation and also requires that the parish break even on an exemption by realizing positive net property tax revenues within eight years of granting it.
In the middle is a proposal by Chief Administrative Officer Darryl Gissel, who represents the mayor’s office on the committee. His proposal would base the amount of an abatement on a rate-of-return model, requiring the parish to break even on an exemption within 10 years. The return on investment would be calculated using projected property tax receipts, sales tax receipts, sales tax revenues from construction costs, and the projected payroll for the number of new jobs created.
The committee, appointed late last year by Mayor Sharon Weston Broome, is under pressure to establish a criteria for ITEP abatements soon. Other neighboring parishes—Ascension, for one, which awarded an exemption to Methanex earlier this week—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.
The committee meets at 10:30 Monday in the Metro Council chambers at City Hall, 222 St. Louis St.