Louisiana Governor Takes “Jobs” Out Of ITEP Reforms

Just like that, progress is gone. The adjustments Louisiana made to corporate welfare, or the Industrial Tax Exemption Program, in 2016 have essentially been washed away with an executive order by Governor Jeff Landry. The announcement was made on February 21st at a business gathering.

The Industrial Tax Exemption Program, or ITEP, has long been blamed for many of Louisiana's economic woes. The basic premise is that the government gives the tax rights for industry away to companies when they operate in the state. For decades these decisions were made by non-elected officials in secret. Giving away billions (if not trillions) of dollars to corporations from the state.

For years, Louisiana was giving away more money to corporations than any other state. As an example, before the ITEP changes, Texas was giving away about $89 per resident to corporations while Louisiana was giving away $2,857 per resident. Caddo Parish alone was giving away more money to companies than THE ENTIRE STATE OF TEXAS.

Which is why the program has regularly been referred to as corporate welfare. These deals were made with no strings attached, just giving the corporations whatever they wanted.

In 2016, the ITEP program was altered; capping the tax abetment to 80%, and adding job-creation requirements. The 2016 changes also gave the power of the tax exceptions to the governing bodies who would be paying for them. That means local school systems, municipalities, and law enforcement organizations. One of the first supporters of the changes was then Caddo Parish Sheriff Steve Prator.

Sheriff Prator was asked to give free money to corporations, and he declined. The Sheriff pointed out that giving this money away wasn't helping to keep the local area safe. And he's right.

Louisiana has always had an odd way of looking one of its biggest natural industries, oil & gas. In some instances, reducing tax incentives in an area can cause industry to leave for greener pastures. But when Louisiana is home to vast deposits of oil and gas, the companies HAVE to be here. You can't drill for Louisiana oil in Nebraska. You can't frack Louisiana's natural gas from Vermont. Giving money to these companies isn't keeping them here, its just hurting the state.

Those companies drive on the roads, use the water, utilize the train systems, and take advantage of the state, without paying for it.

Now, after the ITEP game was made more fair, we're going back in time. As Governor Landry has removed the job-creation requirement and the local approval from the ITEP rules. Going back to a system where a small group gets to create the rules, instead of the people actually paying for it, and it doesn't matter if a business ever creates a job when they're getting the welfare.