Schroder Says Locals Should Have Say On Industrial Tax Break

By Greg LaRose, Louisiana Illuminator

April 4, 2023

13:00
Brief

• Election 2023
• Govt + Politics

In A Flash
Schroder says locals should have say on industrial tax break

By: Greg LaRose - April 4, 2023 1:00 pm

Treasurer John Schroder talks with supporters after launching his campaign for Louisiana governor Feb. 9, 2023, at the Fleur de Lis Event Center in Mandeville. (Greg LaRose/Louisiana Illumninator)

Companies looking to set up shop in Louisiana expect some sort of incentive to do so, Louisiana Treasurer and candidate for governor John Schroder said. But it should be up to local governments to decide whether they want to forego tax revenue in order to lure businesses to their backyard, he told reporters Monday.

Schroder was the featured speaker at the weekly Baton Rouge Press Club luncheon, where he was asked about his views on the Industrial Tax Exemption Program (ITEP). The incentive provided businesses a 100% break on local property taxes until 2016. That’s when Gov. John Bel Edwards issued executive orders that reduced the exemption to 80% and, most notably, gave local taxing authorities the power of first approval.

Beforehand, the appointed state Board of Commerce and Industry decided who received ITEP awards, and they were often doled out with minimal review. Local governments had long argued for a great say in the corporate giveaway that cost them millions in tax revenue annually.

Schroder said a business will most likely locate where they can obtain such incentives, and “entrepreneurs need to be in the room” when decisions are made on whether to provide tax breaks.

“These companies don’t locate here if they’re not getting some benefit because they can go someplace where they are,” the treasurer said. “But I do support the locals having a say because they have to deal with the infrastructure, education, everything. They should have a say.”

In conversations at the Capitol, there has been bipartisan support among state legislators for retaining local approval for ITEP awards once Edwards’ executive orders expire at the end of his term in January. But a bill that would have put the power in local hands, authored by Sen. Rogers Pope, R-Denham Springs, failed in the Senate last year.

Watch Treasurer John Schroder speak to the Baton Rouge Press Club at its April 3, 2023, luncheon.

The debate over ITEP came to a head recently after Folgers Coffee Co. sued taxing bodies in New Orleans that rejected property tax breaks for two of its facilities there. The judge in the case issued an injunction on Folgers paying its taxes while the process played out. The Board of Commerce and Industry overturned the local decisions, but the governor pulled rank and rejected the board’s vote. The judge then lifted his injunction, which means Folgers must pay an estimated $5.1 million tax bill.

Schroder said he has talked with companies regarding ITEP and was told their issue isn’t with giving locals the authority to approve or reject the incentive.

“They don’t mind investing that money,” he said, “but they want to see it invested where the money is having an impact.”

The treasurer said companies have expressed “trust issues” with local governments that aren’t spending tax dollars wisely without specifying what parishes or cities he was referencing.

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Greg LaRose

Greg LaRose has covered news for more than 30 years in Louisiana. Before coming to the Louisiana Illuminator, he was the chief investigative reporter for WDSU-TV in New Orleans. He previously led the government and politics team for The Times-Picayune | NOLA.com, and was editor in chief at New Orleans CityBusiness. Greg's other career stops include Tiger Rag, South Baton Rouge Journal, the Covington News Banner, Louisiana Radio Network and multiple radio stations.

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The Louisiana Illuminator is an independent, nonprofit, nonpartisan news organization driven by its mission to cast light on how decisions are made in Baton Rouge and how they affect the lives of everyday Louisianians, particularly those who are poor or otherwise marginalized.