East Baton Rouge School Board receives conflicting advice over industrial tax exemptions
The East Baton Rouge Parish School Board heard two very different approaches Thursday on how much control it should retain over its newfound power in the granting of industrial tax exemptions.
Baton Rouge Area Chamber’s Donnie Miller urged the board to adopt a “streamlined, transparent” process, pointing to some Texas counties where local industrial development boards are delegated the power over tax exemptions.
Miller also noted that West Baton Rouge and West Feliciana parishes recently agreed to continue granting industrial tax exemptions in full, putting East Baton Rouge at a potential competitive disadvantage if it doesn’t do the same.
“Unfortunately, now we are competing against other parishes,” Miller said.
The group Together Baton Rouge, which has lobbied for curbs on the tax exemption program, suggested the School Board keep its power in full. A parade of speakers from the group, which is a coalition of church and community activists, urged the board to use this power to collect more tax money to benefit public schools.
“The governor has taken the muzzle off, and we don’t want your voice to be muted,” said Edward Cage, a member of the group.
The School Board took no votes Thursday but plans to revisit the issue soon.
Under an executive order issued by Gov. John Bel Edwards last summer, a manufacturer seeking an industrial tax exemption must first get the approval of the School Board, sheriff and parish government in the area where the company hopes to build before taking its request for a tax exemption to the state Board of Commerce and Industry.
School Board member David Tatman asked Miller, director of business development for the Chamber, whether the sheriff, the School Board and city-parish government could set up an industrial development board to vet exemption applications but still retain right to approve them.
“It still could be a little convoluted?” Tatman asked.
“Very much so,” Miller responded.
Miller also pointed out that when companies locate here, they can produce a lot of taxes and jobs. For instance, one recent economic development project would have brought with it 600 jobs and paid Ascension Parish about $1 billion over a decade in property and sales taxes if it had located there rather than Corpus Christi, Texas, where it ultimately decided to go.
Brod Bagert, lead organizer with Together Baton Rouge, said tax exemptions rarely result in such benefits.
As part of a forthcoming analysis of the state’s tax exemption program, Together Baton Rouge determined that only 6 percent of the exemptions approved went to one that actually created jobs and generated tax revenue that wouldn’t have already been created.
Bagert said the other 94 percent was for equipment and maintenance capital,” which should not be qualified for an exemption.
He suggested the School Board in the future should disallow such requests. That’s a much tougher stance than Together Baton Rouge took until recently when it suggested cutting exemptions to just 50 percent of what they were.
“No one needs to give you an incentive to wake up in the morning. You’re going to wake up in the morning anyway,” Bagert said. “If they give you money to wake up in the morning, that’s a gift.”
Since 2000, East Baton Rouge Parish government has missed out on $789 million in taxes that would have been collected from manufacturers but for the state-run Industrial Tax Exemption Program, or ITEP, according to Together Baton Rouge. The school system’s share of that would have been $318 million.
“We could be a top school system if we had just had that extra money,” said Naomi Hill, a retired school principal in Baton Rouge.
Kathryn Grigsby urged the board to collect more of the money it has previously had no choice in whether to keep.
“For last 80 years, we’ve been giving away not just the farm but our future,” she said.
Most of the School Board members held their fire, giving little indication of what they will end up doing. Board member Vereta Lee was an exception.
“I’m for getting every penny we can to help our children,” Lee said.