By JANET McCONNAUGHEY, Associated Press
NEW ORLEANS (AP) — State and local governments in Louisiana have offered an estimated $1.5 billion in incentives to persuade a Taiwanese company to locate a $9.4 billion plastics complex along the Mississippi River upstream from New Orleans, Louisiana Economic Development Secretary Don Pierson said.
The package includes about $1.4 billion in local property tax exemptions for the Formosa Petrochemicals Corp. subsidiary that would build and run the plant, Pierson said in a statement emailed Monday night.
Louisiana’s Board of Commerce and Industry and Gov. John Bel Edwards must sign off on the tax breaks, which would fully exempt the plastics complex from local property taxes for a decade. Such long-term exemptions are now against the rules, but this one could be grandfathered-in because it was initially offered when the Formosa subsidiary first proposed the plant in 2015.
Edwards changed the property tax program’s rules in mid-2016 to allow five years of full exemptions and three of 80 percent exemptions, saying he wanted limited tax dollars to be spent wisely. He earlier required tax breaks to be tied to job creation and retention and required local governments to be consulted. Some groups wanted more changes to reduce tax breaks.
An analysis made for Formosa subsidiary FG LA LLC by economist James Richardson estimates that the project will generate $675 million in new state and local taxes through 2035. His report estimated that, including ripple effect jobs, the plant will also bring $4.7 billion in new personal earnings and $18.5 billion in business spending statewide during the same period.
The complex’s payroll is expected to reach $121 million by 2030, he wrote.
Aside from the industrial tax exemption program, other estimated incentives add up to about $146 million: $125 million over 10 years in rebates for well-paid jobs; $12 million in a performance-based grant and $9 million for a state job training and recruitment program.