Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations
Hear the latest from the WRKF/WWNO Newsroom.
Sat 3/2 5:20pm: Online streaming for WRKF is operating normally following an outage Saturday afternoon. Thank you for your patience.

Bending the New ITEP Rules

LA Dept. of Economic Development

“Everyone in local government says, ‘Let me take care of myself,’ because we took away their tax base -- and it has been going on for years,” Robert Adley, the governor’s representative to the Board of Commerce and Industry, says. “That’s what this is really about.”

“This” is the Industrial Tax Exemption Program, also known as ITEP. 

For years the state Commerce and Industry Board granted five to ten-year local property tax exemptions to companies building or expanding facilities and promising to create new jobs. Governor John Bel Edwards ordered changes to the rules last year, and that has created no small amount of controversy.

Late last week, a Lafayette injection molding company, ASH Industries, appealed its denial of the exemptions. While the company had ultimately gotten local approvals, it was applying for ITEP well after it had already purchased the new equipment it wanted to exempt.

Broderick Bagert of Together Louisiana, a coalition of churches and community groups that opposes the exemptions, reminded the board of the logic behind the new rules.

“An investment that’s already been made cannot be incentivized by an exemption that happens after the fact,” Bagert said.

State Senator Rick Ward, a member of the C&I Board, disagreed.

“If all we do is have a set of cookie cutter rules, what’s the point of having these meetings?” he asked. “I think that this particular circumstance lends itself to us making an exception.”

But Bagert warned they were risking lawsuits from other companies, if they bent the rules this time.

“Anytime exemptions like this across the country have been challenged, courts have determined the outcome on what they call a ‘but for’ analysis: if the exemption hadn’t been provided, would they have done it anyway?”

State Senator Norby Chabert also on the C & I Board, seemed unconcerned.

“Then we’ll go to court,” he stated. “Here in the legislature, we vote on unconstitutional stuff every day. And a lot of it gets challenged, and a lot of it gets proven to be unconstitutional.”  

The Commerce and Industry Board ultimately voted to reverse their denial of the exemption, but the governor would still have to approve it.