Corporate Tax Reform Bills Have Tough Day In Legislature
Senator J.P. Morrell's bill to trim a portion of the Industrial Tax Exemption Program didn't fare well on the Senate Floor Tuesday.
Senator Morrell explained the ITEP "is a program that’s been in the state for decades that allows for a board called the Board of Commerce and Industry when negotiating for companies to make expansions or build new plants for example, that the state can forgo the collection of property tax for said expansion.”
Morrell says since property taxes don’t go to the state, the exemption really means less money for local government. His bill sought to curb that.
“When the Board of Commerce and Industry is considering doing an ITEP contract to allow for this to happen, the education portion of a mileage cannot be given away," he explained, meaning companies with this exemption would have to pay the portion of property tax dedicated to public schools.
Senator Bret Allain offered an amendment to this bill that, over the course of ten years, would phase out the controversial inventory tax, a type of property tax that generates revenue for local governments. It came as a recommendation from the Task Force on Structural Changes in Budget and Tax Policy. The amendment was rejected by the Senate.
Morrell defended his measure, saying the Legislature has less resources to give school boards.
“As we have tremendous expansion in parishes like Lake Charles and Ascension," he says, "you’re also not investing in the schools necessarily to educate the people who are moving to these parishes.”
Morrell’s bill failed, with only thirteen Senators in support. However, he does reserve the right to call it back for reconsideration.
Over in the House Ways and Means Committee, Representative Kenny Havard presented his business tax bill that would set a low rate in lieu of corporate and franchise taxes. He says the intention of his bill is not to generate large amounts of revenue, but "to get to a low corporate tax structure that’s predictable.” The bill didn’t make it out of committee.
It remains to be seen how much enthusiasm legislators will have for the corporate tax reform bills still to come.