ITEP authority could be consolidated to parish industrial boards

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The power local governing authorities have to approve property tax exemptions for large industrial developments could soon transfer to separate, singular parish industrial development boards, reports Louisiana Illuminator.

The Municipal and Local Affairs Policy Council, which Landry’s transition committee established to identify challenges facing local governments, submitted a recommendation to consolidate and streamline the approval process for the state’s Industrial Tax Exemption Program.

Guy Cormier, who serves as executive director of the Policy Jury Association of Louisiana and helped lead the transition council, says his council recommended local ITEP approvals require only a single vote from a parish industrial development board rather than having each individual parish taxing authority consider tax exemptions separately.

Under the current ITEP rules, a parish’s council or police jury, its school board and sheriff each get to approve or reject their portion of the tax exemption.

The decades-old ITEP program once gave large manufacturers a 100% property tax break with no requirement they create jobs or some kind of benefit for the community. Property taxes are a primary source of revenue for local governments to pay for public schools, law enforcement, road maintenance and other community services.

During those times, the state Board of Commerce and Industry, composed of unelected appointees, had sole authority to decide all ITEP applications statewide and often approved applications with seemingly little scrutiny or concern for the tax revenue loss for local communities.

This eventually prompted opposition from groups such as Together Louisiana, a statewide network of community organizations and nonprofits that wanted a local say on sizable tax exemptions.

When Gov. John Bel Edwards took office in 2016, he issued executive orders to change ITEP policy. He reduced the tax exemption to 80% of property taxes, required the creation of jobs in order to qualify and—most significantly—gave local government bodies the authority to approve or deny their portion of the exemptions.

The Landry transition council proposal would transfer approval authority to a single parish industrial development board, composed of members or appointees from the parish council, school board and sheriff. Parishes that don’t already have such a board would get the option to form an ITEP council to serve in that capacity, Cormier says.

Read the full story from Louisiana Illuminator.