Editor’s note: In the Feb. 3 edition of The News, McHugh David incorrectly cited the recent vote on drainage as 5-4, which was actually 8-0, when referring to the 5-4 vote on a multi-family development called Starwood Knoll and its relationship to zoning. The News apologizes for the error and any inconvenience.
Surprising news out of the Washington, D.C., area as The New York Times picked up the report regarding the East Baton Rouge Parish School Board declining ExxonMobil’s Industrial Tax Exemption Program (ITEP) request. The headline suggested that the Louisiana-based governing body had taken a bold step (in a positive sense) of combatting “big oil.”
A quick glance over the article suggests a stunning lack of local understanding.
Those who live in and around the Baton Rouge area understand that ExxonMobil, to date, is more than just a few hundred thousand dollars in windfall from a capital investment. They provide jobs to thousands of individuals, flowing dollars into the local economy through the secondary market through their payrolls; Exxon is still the highest payee of local property taxes, despite tax breaks; they donate money to the local universities – Southern and LSU -- and they also participate in educational programs and funding for the local School Board.
Is ExxonMobil the end-all, be-all in Baton Rouge and the surrounding areas? Certainly not; there are plenty of other industrial and large-scale businesses that provide for the area. Are they a major cog in the economic wheel of the capital region? Also yes, and prodding them so quickly when the battle fires got hot enough that those in favor of denying them ITEP could feel the money was a simple display of bad timing.
With EBR School Board’s cart now out in front of the horse, ExxonMobil issued a quick reply that perhaps the Red Stick’s market was a little too volatile, not very predictable, and not business friendly. Blowing smoke? It appears not, as its Baytown facility announced just two weeks later that new capital investment – higher than previously announced – would expand the Baytown production to nearly the same level as Baton Rouge.
The biggest concerns here are the wide gaps between Louisiana’s tax structure ranking versus Texas, the Bayou State’s education ranking versus Texas, and its infrastructure ranking versus Texas. Unfortunately, Louisiana ranks near the bottom of all categories – and well behind Texas.
From an economic-timing standpoint, it didn’t help that just a week later audit reports showed the EBR School Board misappropriating money. It disrupted general trust in local governmental entities by locals, corporations, and workers. The move shifted power away from local entities and back into ExxonMobil’s hands because the multi-national corporation had a few things Baton Rouge did not – financial experience, and patience.
Constant deficits followed by surpluses, evidence of misappropriation and downright fraud are still commonplace in Louisiana’s political landscape. Under what circumstance did any group find this move financially responsible?
Livingston Parish School Board administrators said, “We’ll get better” when more stringent requirements were released for school grading – EBR just went for the low-lying fruit, as part of a battle against big corporations.
It’s a battle that needs to be waged at some point, truly, because many of these companies are getting away with quite a bit via the ITEP program, and that’s money that could fund new teachers’ salaries, new facilities, upgraded equipment for classrooms – maybe teachers wouldn’t have to pay for their own equipment, a novel concept.
And yet, the timing chosen was now. Louisiana just wasn’t ready to poke the giant, not yet, as financial consistency still eludes much of the Baton Rouge area and the state.
Rankings haven’t gotten better in any of those categories yet as improvements are being considered, and, in the case of school grading, enacted – but changes have not yet taken hold.
It’s important to understand where Louisiana sits economically, from a local point of view. The whole situation seems like a grand gesture toward fighting some corporate financing that’s unfair, and if taken in a vacuum, it does play out that way.
But life isn’t a vacuum, and Baton Rouge needs ExxonMobil just like ExxonMobil needs Baton Rouge until fiscal responsibility and proper policy reign at the Capitol. Until then, all this talk from afar of a battle against corporations needs to stop – there are local, regional, and multi-state economic factors at play that have not been considered.
Oh wait, The Times said a battle against “big oil?” In the state that produces 3 million barrels per day, second only to Texas?
Swing and a miss.