Proposed Amendment No. 8 will encourage businesses to invest in Louisiana by providing a partial property tax exemption to competitive projects in certain targeted industries – projects the state currently is losing because our tax environment is not competitive with other states for projects in these industries.
The exemption will be offered only in parishes that elect to participate in the program.
To bring the amendment to the ballot, the Legislature approved the Property Tax Exemption for Competitive Projects this year, and Governor Bobby Jindal signed the new legislation, Act 871, into law. Now, Louisiana voters will decide on November 6 whether to make this amendment a permanent part of the state's constitution.
Act 871 will enable Louisiana to land major job-producing investments we're not currently getting. Large data centers, multi-state distribution facilities, and large corporate headquarters facilities are examples of the kind of job-creating employers state and local officials will be able to more effectively recruit to Louisiana with this incentive. These projects will provide new, high-paying jobs for our workforce for years to come.
While the Tax Foundation previously determined that Louisiana ranks very well for state-local tax burdens for new manufacturing projects, the state ranks relatively poorly for capital-intensive, non-manufacturing projects. For a new, multi-state distribution center, Louisiana has the second-highest state-local tax burden of 12 Southern states. Proposed Amendment No. 8 would put participating parishes in a much more competitive position to compete for high-quality, capital-intensive, non-manufacturing projects.
Parishes, towns, and cities will have a voice in choosing whether to provide this parishwide incentive.
For a parish to participate, five local entities must all opt into the program – parish government, municipal governments (any that levy a property tax), the sheriff, school board(s), and the parish assessor. Parishes later would be able to opt out, should they choose to do so, with only previously approved projects continuing to receive the incentive.
This amendment also will boost tax revenue for local parishes, municipalities, and schools. The first $10 million or 10 percent of market value, whichever is greater, will be taxed normally on all eligible projects that receive this exemption.
The remaining capital investment will be tax-exempt for a maximum of 10 years. The incentive will be available only to projects that will derive the majority of their revenues from out-of-state customers, ensuring that we will not be providing this incentive to businesses that would have located here anyway.
According to Southern Business & Development, Louisiana has secured more significant business development projects per capita than any other Southern state for the last four years in a row.
However, the state hasn’t been successful in attracting the kinds of projects targeted by this proposed incentive program because the state-local tax burdens for these types of projects are well above the national and Southern averages. This targeted incentive will help level the playing field.
No current taxes would be removed from property rolls, and new projects would be required to make a capital investment of at least $25 million and to create at least 50 new direct jobs in Louisiana to qualify for this incentive.
"The Louisiana Municipal Association decided to back this constitutional amendment for one overwhelming reason," said LMA President Hilda Daigre Curry, mayor of New Iberia. "This amendment will help lead the way to more business investment in our state that will create more jobs for Louisiana’s citizens and greater prosperity for our communities. It's really that simple."
LMA leaders say that citizen support of Proposed Amendment No. 8 on Nov. 6 will help state and local leaders build a better and more prosperous Louisiana in the months and years to come and for future generations of Louisianians.
Since 1926, the Louisiana Municipal Association (www.lma.org) has existed to provide a broad range of information, education, and technical assistance services to the state’s 305 incorporated municipalities.
The LMA is a non-profit, non-partisan, and non-political organization in which membership is voluntary. Its primary quest is to promote among its members progressive leadership, efficient delivery of public services, and effective performance in government.
Post a Comment