BATON ROUGE, La. (AP) — The state House on Monday fell three votes short of approving legislation backed by Louisiana’s business lobby to lessen local government decision-making authority over a lucrative property tax break for manufacturers.
The House voted 50-44 for the bill, but it required 53 votes to pass.
Republican Rep. Rick Edmonds had proposed to rework the rules for the 80-year-old Industrial Tax Exemption Program, which gives approved manufacturing facilities exemptions from paying local property taxes for up to 10 years.
Democratic Gov. John Bel Edwards has tied the property tax breaks to job creation, reduced the size of the tax exemptions available and given local government a say in whether exemptions are issued. The program decreases revenue that would otherwise flow to school boards, sheriffs’ departments and other local government operations.
Edmonds sought to create a three-person local board — including the sheriff, school board president and head of the municipal authority — to review tax break applications, rather than full school boards and city councils. The governor opposed the proposal, which is backed by the Louisiana Association of Business and Industry and the Louisiana Chemical Association.
Edmonds can bring it up again if he thinks he’s picked up the three votes he needs. A second proposal to rework the program’s rules has stalled in the Senate.
Business groups have criticized the local approval process as confusing, complicated and damaging to economic development in a state with an already difficult-to-navigate tax structure.
Edmonds, of Baton Rouge, said the industrial tax break program is the “best tool that we have” to attract industry. He said he’s proposing a streamlining effort that maintains local input in the tax breaks. He said the changes enacted by the Edwards administration will cost Louisiana billions in lost industrial projects over the long-term, if the regulations aren’t simplified.
“Because of this unpredictability, we are seeing businesses that are deciding not to do business in the state of Louisiana,” Edmonds said.
Opponents, including the associations representing parish police juries and school boards, say the review boards would not offer enough local input.
Rep. Ted James, a Baton Rouge Democrat, said Louisiana’s Industrial Tax Exemption Program has been considered overly generous compared to programs in other states. He said businesses don’t want a predictable process, they want predictability that the tax break application will be rubber-stamped.
“Your locals know what’s best for your parish,” James said. “The program is working.”