What impact will Gov. Landry’s ITEP changes have?


Gov. Jeff Landry signed an executive order Wednesday that significantly alters Louisiana’s Industrial Tax Exemption Program.

The executive order not only kills job creation and retention requirements for businesses participating in ITEP, but also streamlines the application process, eliminating the need for an application to be reviewed by multiple local agencies. Now, an application will only need to be considered by two industrial boards, one local and one statewide. If those boards ever have a disagreement about an application, the governor will have final decision-making authority.

It is important to note that the changes apply only to future applications and will not affect existing exemptions.

Together Louisiana, a statewide network of more than 250 civic organizations and religious congregations that for years has been highly critical of ITEP, is unsurprisingly concerned about these new developments.

“If a corporation gets a tax exemption, not to bring in a new plant or create jobs, but just as a public subsidy for its routine capital investments—investments, that is, that would have happened anyway—the result is not economic development,” a statement from Together Louisiana reads. “It’s the opposite.”

Together Louisiana argues that in that scenario, local communities will not benefit from any new economic activity and they will lose millions in tax revenue. Jobs may also be lost, and property taxes for everyday citizens may rise to offset the tax revenue lost through ITEP, the organization says.

“The most important thing at stake here is whether ITEP operates as an incentive or as a gift,” the statement reads.

On the opposite side of the opinion spectrum is the Louisiana Mid-Continent Oil & Gas Association.

In a statement, LMOGA President Tommy Faucheux applauded the changes, saying they will help to create a more predictable tax climate for businesses looking to invest in the state while also creating growth opportunities for local communities.

“The long-overdue changes will streamline the ITEP process, encourage industry investments and support economic growth and prosperity in Louisiana,” Faucheux says.