The denial of tax exemptions to industries through the Industrial Tax Exemption Program could bring far-reaching adverse effects to the local, parish and state government, according to the president of the Louisiana Association of Business and Industry.
The East Baton Rouge Parish School Board’s decision to deny ITEP requests from the ExxonMobil Baton Rouge Refinery adds to the state’s reputation as an unfriendly business climate, Stephen Waguespack told the Press Club of Baton Rouge at its weekly luncheon Monday.
Though the loss of industry poses a large enough threat, Waguespack said the largest volume of inquiries he has received after the ITEP decision has come from car dealerships, print shops, and other small companies.
“Those are the ones who feel most threatened if or when big investments leave the state,” Waguespack said.
Industrial jobs account for seven percent of the workforce and 130,000 jobs in Louisiana, he said. Average pay for manufacturing workers in Louisiana is $87,212 – more than double the state average of $41,587, he said.
The business industry boasts those averages in Louisiana despite a higher tax burden here than in other states, Waguespack said.
The Louisiana business sector paid an estimated $10.1 billion in taxes to state and local government in Fiscal Year 2017. Sales tax comprised the largest share of the tax revenue (37 percent), followed by property tax (32 percent), excise taxes (15 percent), licenses (8 percent), and income tax (7 percent).
Louisiana also ranked No. 1 in the nation for annual increase in business taxes from 2016 to 2017, due to legislation that increased collections of corporate and income tax, a hike in sales tax and the expansion of business input to which the sales tax applies, he said.
“The current rhetoric is going out of control, and we have to stop the escalation,” Waguespack said. “It’s destroying our business climate.”