Walter Pierce

Seeing is Believing Long the victim of a supply-side scam by big business and oil/gas, Louisiana is beginning to right decades of wrong.

by Walter Pierce

The fever is finally breaking. Our collective state temperature is trickling back down to 98.6. It even appears that a sizeable number in our Legislature are getting it: Louisiana needs functional roads and bridges, libraries, parks and museums, public universities and charity hospitals for the poor. The business and oil/gas lobbies in Louisiana long and successfully sold the notion that their profits are our profits even as they’ve profited at the expense of state taxpayers. Finally we’re seeing an honest, sober assessment of that claim in several areas of state government.

We see it in state lawmakers’ critical look earlier this year at the many business incentives that have proliferated in Louisiana law over the decades. Our legislators, Democrats and Republicans, chose in the face of intense pressure from the business lobby to ask business to pull its weight — at least for a few years.

We see it in Gov. John Bel Edwards’ executive order this past spring forcing a rework of the Industrial Tax Exemption program administered by an un-elected and largely unaccountable Board of Commerce and Industry. The ITE program, 80 years old and used under both Democratic and Republic governors, had become a parody of its original self: promoting job creation by forgiving corporations’ local property taxes in exchange for expansion and job creation. An analysis found that the Board of Commerce and Industry was waiving nearly $17 billion in local property taxes at a cost of $535,000 per job created, and the local taxing authorities, including in Louisiana’s poorest parishes, had no say in whether an ITE was granted.

According to a recent local news report, $5.4 million in property tax exemptions were granted to companies in Lafayette Parish over a 10-year period in 2013. In exchange, the companies made capital investments ranging from $50,000 to $16 million. Their ITE applications said such expansions would create 369 new local jobs. By those numbers, Lafayette Parish gave up $5.4 million in property taxes — for our schools, our roads, drainage, police and fire protection — to create 369 jobs at a cost of $14,634 per job. Who got the better end of that deal — the corporations or us taxpayers?

Edwards caved a little to the business lobby this fall and decided that new rules governing ITEs — tying them to real job creation and giving local taxing authorities some say in who gets them — wouldn’t apply to renewals. But the new system will apply to future ITEs.

We see it in Edwards’ maneuvering to get oil and gas to the bargaining table to pay its fair share in fixing our coast, which the industry admits in private documents — though not so much publicly — it helped shred and sully by dredging canals and leaving abandoned well sites polluted.

And we see it in the reconstitution of the state Department of Natural Resources and its division, the Office of Mineral Resources, under Edwards, detailed in this week’s profile of DNR Assistant Secretary David Boulet. He now heads OMR, a little known DNR agency that, when managed properly, accounts for a sizeable chunk of state revenue via oil and gas royalties from state-owned lands. For much of the Jindal era, DNR was the clubhouse overlooking state government’s 18th hole where the oilmen sipped their brandy and chuckled at their good fortune. Louisiana missed out on north of $1 billion in royalty revenue and severance taxes from oil and gas operations during Jindal’s tenure. The clubhouse is closed for renovation.

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