January 18, 2019; The Advocate (Baton Rouge, LA)
Last Thursday, the East Baton Rouge Parish School Board on Thursday voted 5–4 to reject giving tax breaks to ExxonMobil, the biggest taxpayer in that county (parish). This decision marks the first time the school board has rejected a tax abatement and is part of a larger trend of local officials taking a more critical eye toward corporate tax abatements.
As NPQ has covered, with the public cost of corporate tax abatements becoming more visible due to new government accounting rules, opposition to doling out such abatements has also risen, as examples from Asheville, North Carolina to Nashville, Tennessee—and now East Baton Rouge, Louisiana—indicate. Increasingly, too, it is becoming evident that the money spent on corporate tax abatements can reduce the amount of available public education funding, as a 179-page report that NPQ profiled last year by Timothy Bartik of the Upjohn Institute indicates.
In 2016, the state of Louisiana gave local government boards, including school boards, the option to “opt out” of the portion of tax abatements that affects them. That is precisely the step that the East Baton Rouge School Board chose to take last week.
“The 5–4 vote,” notes Charles Lussier in The Advocate, “marked a rare defeat for ExxonMobil, which has received hundreds of such tax exemptions.” Leading the campaign to defeat the exemptions were a faith-based group Together Baton Rouge and two teacher unions. “This is a new day for a new type of economic development in Louisiana,” Dianne Hanley, a leader of Together Baton Rouge, said after the vote.
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ExxonMobil, notes Lussier, “was seeking exemptions from school property taxes worth about $2.9 million over 10 years. The work in question was completed in 2017, and ExxonMobil had a difficult time explaining why it still needed a tax break for them.”
According to Lussier, there has been a “fiery debate” over corporate tax breaks and their impact on teacher pay. Last Thursday’s board meeting involved three hours of debate, involving dozens of speakers. Among them was retired Lt. Gen. Russell Honore, who expressed his opposition to the tax breaks this way: “It’s not that we don’t like Exxon, but it’s time they put their big boy pants on and run their business based on their profit.”
The school system’s poor financial situation certainly weighed on board members. According to Lussier, “Superintendent Warren Drake is trying to find ways to save $30 to $40 million over the coming months in order to keep the system out of the financial hole.” Last October, teachers had voted 445–6 to conduct a one-day walkout if the tax abatements were passed.
“We are on life support, point blank period, and we deserve this money. I urge you to deny these exemptions,” Tia Mills, president of the East Baton Rouge Association of Educators, said at the board meeting.
Among the five school board members who opposed the ExxonMobil tax abatement was newly seated board member Dadrius Lanus. Lanus, Lussier reports, indicated that he wants to find ways to pay for pay raises and universal early childhood education. “It’s very hard because we have a $30 million deficit, and we got a teacher shortage,” Lanus said.—Steve Dubb