Who should control ITEP?

Who should control ITEP?

The business lobby has been in a tizzy since the East Baton Rouge Parish School Board voted Jan. 17 to deny property tax breaks sought by ExxonMobil Corp. for two projects that were already completed. While petrochemical corporations and their lobbyists weren’t thrilled when Gov. John Bel Edwards gave local taxing authorities the power to deny property tax breaks under the Industrial Tax Exemption Program, their anger grew exponentially after the school board elected to actually use that power. The AP’s Melinda Deslatte:

At their start, the changes prompted objections from business groups, who described the regulations as confusing, complicated and damaging to economic development in a state with an already difficult-to-navigate business tax structure. But tax breaks continue to be approved. In December, a company planning a $15.9 billion liquefied natural gas export terminal in Calcasieu Parish won an exemption that could eventually be worth more than $2 billion over 10 years. Still, so many applications were in the pipeline under the old rules, there was a lag in learning the true implications of the regulatory rewrite and the control local elected officials can wield. It’s becoming much clearer — and the spurning of Exxon’s tax break by the East Baton Rouge Parish School Board triggered outrage.

Now two Baton Rouge-area legislators want to strip that authority from local government and give it back to the Board of Commerce and Industry (full disclosure: LBP Director Jan Moller is a member).  The Advocate’s Mark Ballard:

What all this rhetoric is really aimed at is returning ITEP to the exemption it was before Gov. John Bel Edwards revamped the essentially automatic 10-year tax break, in which the state forgave revenues local governments use to pay for services like law enforcement, schools and roads. Edwards’ executive order requires “local weigh in” on the exemption applications that have been vetted by state officials and approved by the Board of Commerce and Industry.

But Louisiana Economic Development Secretary Don Pierson said local governments deserve a voice in what happens to their tax dollars – as happens almost everywhere else.

He opposes “the idea of not allowing their (local) voice,” Pierson said Thursday, adding that the new ITEP procedures “is a fair way to include the local voice. It is their revenue stream.” Forty-three states offer a similar tax break and not a one includes a state mandate, he said.

Columnist Tim Morris, writing for Nola.com/The Times-Picayune, sees ITEP as a symptom of a deeper malady: Louisiana’s longtime reliance on bribes to entice businesses to locate and remain in the state, which means fewer resources available for investments in education, infrastructure and a strong safety net.

Why do we have to offer exorbitant bribes to get people (and businesses) to stay here? … A local newspaper declared the ITEP tax breaks “a necessary evil” for keeping the state from becoming an economic wasteland. So why is it so hard for Louisiana to have nice things? Why is evil necessary to keep our lights on?

But the real question is even more simple: Is it actually necessary for Louisiana to offer the nation’s most generous tax breaks in order to attract manufacturing jobs — and to cut local governments out of the process? Or would petrochemical industries still flock to Louisiana because we have something no other state can offer — the mouth of the Mississippi River, major ports and an unmatched industrial construction workforce.

The debate continues this afternoon, when Louisiana Association of Business and Industry chief Stephen Waguespack speaks to the Press Club of Baton Rouge.

 

The mental health crisis
Dakota Theriot is only 21, and will probably never see another day of freedom after his arrest last week on charges of killing five people in South Louisiana – including his parents. While law enforcement labeled Theriot a “monster,” Advocate columnist James Gill wonders what might have been if Louisiana had not made such drastic cuts to mental health care during the past decade.  

Dakota Theriot needed help, and five people are dead after state authorities did not, or could not, provide it. Anybody who came in contact with him lately could see he was going to lose it one day. Mental health care is lacking all over the country, but particularly so in Louisiana, yet another legacy of the fiscal disaster that was the Bobby Jindal administration. … It had been obvious, perhaps for as long as three years before he allegedly murdered five people, that Dakota Theriot was too crazy to be left at large. Even our bare-bones system provides long-term care for the most desperate cases, and Theriot clearly qualified.

 

What if poor people united?  
The first step in addressing poverty, Jarvis DeBerry writes in his latest column, is a willingness to discuss it openly. That’s not easy in a nation where politicians have become expert at dividing groups of people who could have real power if they ever united.

When I asked (The Rev. William) Barber if a general reluctance to use the word poor helps explain resistance to a Poor People’s Campaign, he said he and his co-chair, the Rev. Liz Theoharis, were encouraged to think about a word other than “poor” when resurrecting King’s campaign. “People said we might not want to call it that,” Barber said. Imagine that: trying to address a problem you won’t even name. … Segregation, (Dr. Martin Luther) King said in a 1965 speech, is what the poor white man in the South got instead of decent wages. “And when his wrinkled stomach cried out for the food that his empty pockets could not provide, he ate Jim Crow, a psychological bird that told him that no matter how bad off he was, at least he was a white man, better than the black man.”

 

Taxing the rich is not radical
A lot of the talk among progressives lately has centered on proposals to “tax the rich” — either by raising the top marginal tax rate, boosting the inheritance tax or establishing a new annual “wealth” tax. Doing so would help reduce the yawning federal budget deficit. It would also reduce the economic inequality that has accelerated in recent years. Critics says such tax policies are “radical.” But The New York Times’ David Leonhardt disagrees, and believes taxing wealth could be key to preserving American democracy.

In the face of these trends, the radical response is to do nothing — or to make inequality even worse, as President Trump’s policies have. It’s radical because soaring inequality is starting to threaten the basic fabric of American life. Many people have grown frustrated and cynical. Average life expectancy, amazingly, has fallen over the past few years. … The proposals (to change this) also happen to be popular, broadly speaking. On social issues, like abortion and immigration, the country is deeply divided. But clear majorities support higher taxes on the wealthy, higher taxes on corporations, more education funding and expanded government health insurance. No wonder: Americans don’t resent success, but they do resent not receiving their fair share of economic growth.

 

Number of the Day
$15,000 – Increase in annual earnings for a typical middle-class family, after taxes, if their pay had kept pace with economic growth since the late 1970s. (Source: The New York Times)