The Business Report
An East Baton Rouge Parish committee tasked with establishing criteria for granting property tax breaks to local manufacturers under the Industrial Tax Exemption Program again deferred voting on a matrix proposed by the Baton Rouge Area Chamber, saying it will take up the matter Monday, March 19.
At a meeting this morning at City Hall, committee members said they want to further analyze BRAC’s proposed set of criteria, first presented February 23, before voting.
Members also want to digest criticism of the proposal presented today by the group Together Baton Rouge, which called the matrix a “radical policy” out of step with similar ITEP policies in nearby states.
“Right now this is not anywhere on the spectrum of what ought to be considered,” says Broderick Bagert, lead organizer of Together Baton Rouge. “It creates the impression of scrutiny but really would allow a virtual carte blanche public subsidy for capital investment without expansion.”
Counters Michael Diresto, BRAC executive vice president: “We’ve looked at the best practices of other states in establishing these criteria. This is really based on making sure that for any given project you’re talking about has a reasonable expectation of a ROI for the taxing community.”
The dueling “reasonable” and “radical” descriptions of the proposed matrix underscores how far apart BRAC and TBR remain in their respective positions on the issue. Since Gov. John Bel Edwards granted local governments greater control over deciding the tax break in 2016, those two groups have been most active in trying to influence the way the area local governments administer the policy.
Neither, however, will ultimately decide what criteria local governments in East Baton Rouge Parish will use. That decision rests with the committee, appointed earlier this year by Mayor Sharon Weston Broome. Today, its chairman Skip Rhorer said they’re making progress, however slowly, and will likely end up with a set of criteria that is “somewhere in the middle” of what BRAC and TBR would each like to see.
BRAC’s proposed matrix would grant full ITEP property tax abatements to any eligible small business with 50 or fewer employees for the first five years, and an 80% tax break for years 6-8.
Larger companies would be evaluated on a sliding scale, with smaller investments eligible for a 50% tax break for the first five years and projects over $20 million or creating more than 20 jobs eligible for the full tax break for up to five years, and 80% in years 6-8.
“This is jaw dropping,” says Bagert, arguing that the $20 million threshold is so low as to be meaningless “No other state does it this way.”
Bagert says TBR may present its own matrix to the committee before its next meeting but couldn’t say for sure.
Though the committee deferred voting on the matrix today, it did approve a new ITEP application that companies seeking an industrial tax exemption will have to fill out. The language in the questions on the application is significant because it requires companies to be more specific and transparent about the size of investment they intend to make and how many jobs they will create.
“It’s a step in the right direction,” Rhorer said.