Statement on Gov. Landry’s ITEP Changes

"Gov Landry's reforms should include measures to protect taxpayers from gratuitous public subsidies"

Following Governor Jeff Landry's annoucement that he was issuing an Executive Order changing the State's industrial tax exemption program (ITEP), to allow corporations to receive property tax exemptions without needed to create jobs or obtain the approval of the local elected bodies whose revenue is being given away, Together Louisiana issued the following statement:

"The most important thing at stake here is whether ITEP operates as an incentive or as a gift.

If a corporation gets a tax exemption, not to bring in a new plant or create jobs, but just as a public subsidy for its routine capital investments -- investments, that is, that would have happened anyway -- the result is not economic development. It's the opposite.

In that scenario, local communities don’t get new economic activity, but they still lose the millions in tax revenue from their schools, roads and police. They lose jobs – the teachers, construction workers, sheriffs deputies and others who would have provided the services that went unfunded. And their property taxes start going up, to fill the holes in the tax base left by each new round of gratuitous giveaway.

That scenario was incredibly common with ITEP before 2016.

What we think matters most is that Governor Landry include in his changes measures to protect our State from gratuitous exemptions and the harm they do to taxpayers.