Both Sides Reach Complete Agreement on ITEP in Baton Rouge!
We have received lots of feedback on our recent post about the Industrial Tax Exemption Program.
And thanks to our post both sides came to complete agreement!
Both sides agreed that we were wrong. That is exactly how the conversation goes these days. It convinced us that maybe we are actually on to something.
How can we get past the noise and get to something reasonable and practical? Where does the reasonable majority agree? Residents want more manufacturing jobs and investment. They also want the Industrial Property Tax Exemption to have local input and strong accountability.
There is no question that ITEP still has some problems in regard to how it’s working. In some parishes the program is working well, but some parishes and local agencies are still struggling to set up their local process. Manufacturers are still unclear on the way things work today. Lack of clarity is never a good thing.
If the rules are clear, manufacturers will be able to evaluate their investment plans for any parish in Louisiana without fearing that subjectivity could alter the rules after the fact. ITEP is still not there yet but we can get there from here. Here’s how:
Clear Local Rules:
The Governor gave locals a say in approving these incentives. Some local processes are subjective and confusing. We can all agree that local ITEP rules need to be clear and predictable. If parishes set their own local guidelines for ITEP, those parishes should have one common set of rules for all taxing authorities. Each local taxing authority should absolutely have a say to create and approve that one set of parish rules. The state government should help parishes understand the legal process for setting up local rules too. American greatness and prosperity is rooted in the rule of law. Local processes must be clear, objective, legally compliant, and transparent.
Clear Local Review Process:
There should be a clear and objective way for ITEP applications to be reviewed locally. Local government staff can advise the parish bodies on whether the applications are eligible under their local rules. To get there parishes should set up a common way for a technical review of applications. This removes subjectivity in a way that’s both locally driven and also fair. If an ITEP application is eligible under the local rules it should be accelerated through local approval. Rules can’t predict every situation, so parishes should have a policy for how to handle exceptions for projects that are a priority for the state or the parish but that fall outside of local guidelines for some reason.
Don’t Change The Rules Too Often:
Local rules,once set, should not change all the time. If a manufacturing company follows the rules and makes a decision in favor of investing in Louisiana, parishes should provide guidance that is stable and consistent and that works as advertised.
None of these three things are in place in Baton Rouge and some other places. The state and local coordination over ITEP is a work in progress. We believe the discussions that we have participated in recently are a productive step. Excesses and lack of accountability in the ITEP program before Governor Edwards took office clearly needed to be addressed. Governor Edwards' 2016 and 2018 executive orders have corrected that. However, reasonable people will agree that the three practices we outline above are essential to creating prosperous communities.
Some folks have proposed that the state should help parishes establish a single committee to review the applications on behalf of all taxing authorities. That would help too, assuming that all the taxing authorities get on the same page. The first order of business is clear local rules and fair local practices. We can get there in Baton Rouge and throughout Louisiana. However, we must be clear about one thing that our recent discussions on ITEP and its effect on the prosperity of Baton Rouge has made clear:
The current lack of clarity on the local ITEP process in Baton Rouge must be resolved in MONTHS NOT YEARS or ALL of Baton Rouge will be hurt.
Join us in the reasonable majority that will get it done in a timely manner.
Richard Lipsey
Put Louisiana First