NOLA.com: St. John seeing cash windfall as Marathon gives $20 million ahead of expiring tax breaks

With its tax bill set to skyrocket in 2020, Marathon Petroleum recently presented St. John the Baptist Parish with something that government leaders don't often see: a check for $10 million. And that payment will be followed by another $10 million check on Jan. 15.

It all amounts to a down payment on the additional $44 million in parish property taxes the Ohio-based company will owe in 2020 when some $3 billion in industrial tax exemptions come off the books, officials say.

Parish government, the Sheriff’s Office and the public schools will divvy up the money. 

Marathon, already the parish's largest taxpayer, will owe local St. John taxing entities a total of about $60 million in taxes next year, up from around $16 million. The new property taxes coming from the refinery will boost the parish's overall property tax collections by a whopping 80%, from the current $55 million to nearly $100 million.

Knowing the influx was on the horizon, parish officials worked with Marathon the past two years on the advance payment, which the parish and company announced at a December news conference. 

“It’s our heart’s desire at the Garyville refinery to see our community flourish,” said David Foster, who heads the facility. “Corporations serving only their shareholders — that’s a 1930s, 1940s model.”

The advance property tax payments come on the heels of — but officials insist are not related to — recent votes by the St. John Parish School Board and Parish Council to deny the company's request for new tax breaks. 

Through the state's Industrial Tax Exemption Program, Marathon recently asked the Sheriff's Office, School Board and Parish Council to exempt $25 million in already-completed work from property taxes. The Sheriff's Office signed off on the request, but the School Board and Parish Council said parish schools and government need the extra money.

Under changes made to ITEP rules in 2016, local taxing bodies are now given a vote on the exemptions, which previously had been given out or withheld solely by the state.

The exemption program allows industrial facilities to avoid 80% of the property taxes stemming from an expansion for five years, with the option for a second five-year renewal. 

Proponents of the exemptions say they encourage industries to expand, adding more employees and payroll, which spreads through communities as the money is spent. The trade-off, they contend, works for everyone.

But opponents say the exemptions rob local governments of much-needed revenue. Much of the business expansion, they argue, would likely occur even without the tax breaks. 

Lavelle Edmondson, a manager for state government affairs with Marathon, said the company is “very worried” by the council's and School Board's recent decisions, adding that “we are not comfortable with all of the taxing authorities’ evaluation.”

To be sure, Marathon and the other industrial plants that dot the parish enjoy widespread support from a number of elected officials.

“Industry has been here for St. John Parish and especially the St. John Sheriff’s Office,” said Sheriff Mike Tregre, who OK'd the new exemption for Marathon. “I want to continue those working relationships.”

He called the company's early tax payment "a very good early Christmas present."

Meanwhile, Parish President Natalie Robottom, who is leaving office in January after two terms, called Marathon "the epitome" of a good partner.

The parish government will receive about $3.7 million from Marathon's initial payment, and parish officials plan to spend more than $1 million of that to repay bonds. Another significant portion — over $300,000 — will go toward finishing a project that will switch all the parish’s streetlights to LED bulbs, Robottom said. That project is around 40% complete at the moment, she said.

She said $500,000 will be earmarked for maintenance of the new levee being built to protect LaPlace and Reserve. The $760 million federal West Shore Lake Pontchartrain Hurricane Risk Reduction Project is designed to protect the area from a 100-year storm, or a storm that has a 1% chance of striking in any given year, such as 2012's Hurricane Isaac, which flooded numerous structures in the parish.

The Sheriff and School Board did not present exact breakdowns of how they intend to spend their money.

Marathon, which has operated the Garyville refinery since 1976, has more than 900 full-time employees and thousands more contractors, according to Foster.