Two months loom before the start of the 2019 legislative session, but a potentially explosive battle has already taken shape in Baton Rouge.
It’s a battle that could affect every parish across the state.
Plans are underway by GOP state lawmakers Sen. Mack “Bodi” White and Rep. Frank Foil to reverse an executive order by Gov. John Bel Edwards that gave local tax bodies a considerable amount of leverage in the process to decide which industrial or manufacturing projects should receive tax breaks through the Industrial Tax Exemption Program.
The move comes in the wake of the fallout from the East Baton Rouge School Board’s decision to nix a request from ExxonMobil for $2.9 million in tax exemptions for projects at its Baton Rouge refinery.
The “thumbs down” has already led the global energy giant to seek areas other than Baton Rouge for future expansion projects.
It’s doubtful that ExxonMobil will vacate the Baton Rouge refinery in the immediate future, even if it’s prudent to never say “never” about business.
In the same guise, the amount of the tax credit poses no effect on a company with total assets of nearly $350 billion, but it will likely send projects elsewhere.
The “elsewhere” could apply to a refinery less than 250 miles to our west, or it could mean an expansion on international soil. Either way, it won’t deter ExxonMobil.
It’s a different story for the countless support entities whose livelihood depends on the amount of business they receive from ExxonMobil.
Think about it: office supplies, vehicles, the car dealerships, tires, printing supplies, the bolts, the tools ….the list can go on and on. Unlike ExxonMobil, these businesses do not possess the seemingly bottomless pit of revenue.
In the case of support businesses, they suffer. For many, it’s the loss of their biggest customer and perhaps the one that makes or breaks them.
The cold, harsh reality of this equation tells us that ExxonMobil will not suffer much from the loss of a $2.9 million tax break. Instead, the support businesses, government and local communities will feel the pain.