Sunday, July 14, 2024

New changes proposed to Louisiana property tax break program

by BIZ. Staff

BATON ROUGE, La. (AP) — Louisiana Gov. John Bel Edwards is again seeking to make changes to a decades-old property tax break for industrial manufacturers.

The Advocate reports that the proposal released Wednesday would return the Industrial Tax Exemption Program to a 10-year break from paying local property taxes. That’s the way it had been for decades until changes made by the Edwards administration.

Under the latest proposal, instead of a complete forgiveness of property taxes, however, companies would be able to get a tax break covering 80 percent of the taxes they otherwise would owe. Companies would have to pay the remaining 20 percent of the assessed values.

The change would allow local governments to immediately start receiving revenues to pay for roads and schools needed by the newly hired workforce at the manufacturing facility receiving the tax breaks, Economic Development Secretary Don Pierson said.

Pierson outlined the administration’s proposal to the Board of Commerce and Industry, describing them as “process improvements.” The proposal has to go through a regulatory process, which allows for public input, before the Board of Commerce and Industry votes on the governor’s recommended changes.

There’s been confusion and worry since Edwards, a few months after taking office in 2016, ordered changes to a program that operated for years on autopilot.

The Democratic governor tied the tax breaks to job creation and ended automatic renewals and tax breaks for routine maintenance. He ordered that companies seeking the tax break get approval from the local taxing districts — such as school boards, municipalities and parishes.

Parishes with large industries already quickly got organized and created processes. Other localities without much experience had a tougher time. Businesses wanted more stability and firmer timelines.

The state would present the proposed tax break contract to local tax authorities, which would need to hold a hearing and vote whether to reject the offer. This would give industries a stable timeline of 30 or 60 days to hear the outcome.

If a local taxing authority opts out, whatever property tax millage assigned to the district would still be collected. But it would end the possible confusion of each tax district setting its own rate and requiring assessors to juggle a bunch of different rates for the same property.

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