Together LA releases study on property tax reduction potential of industrial tax exemption reform

Report finds massive tax-cut potential in some parishes, more modest reductions in others

Introduces Reverse Robinhood Index to show how much homeowners and small businesses in each parish are subsidizing industry and the tax-savings from allowing ITEP-exempt property to return to the rolls

Download the full study here.

For the 10 parishes with the highest Reverse Robinhood Index™ ranking, allowing ITEP-exempt property to return to tax rolls after its exemption period would produce:

• A 24 mill property tax reduction in Rapides Parish. This would save the average homeowner in Rapides Parish $251/year and the average business $446/year;
• A 39 mill property tax reduction in Calcasieu Parish. This would save the average homeowner in Calcasieu Parish $515/year and the average business $1,461/year;
• A 42 mill property tax reduction in St. Bernard Parish. This would save the average homeowner in St. Bernard Parish $506/year and the average business $1,137/year;
• A 47 mill property tax reduction in West Baton Rouge Parish. This would save the average homeowner in West Baton Rouge Parish $630/year and the average business $3,632/year;
• A 51 mill property tax reduction in Iberville Parish. This would save the average homeowner in Iberville Parish $463/year and the average business $7,266/year;
• A 56 mill property tax reduction in Ascension Parish. This would save the average homeowner in Ascension Parish $799/year and the average business $3,688/year;
• A 66 mill property tax reduction in LaSalle Parish. This would save the average homeowner in LaSalle Parish $603/year and the average business $624/year;
• A 67 mill property tax reduction in St. Charles Parish. This would save the average homeowner in St. Charles Parish $889/year and the average business $9,674/year;
• A 70 mill property tax reduction in St. John the Baptist Parish. This would save the average homeowner in St. John Parish $556/year and the average business $4,200/year;
• A 144 mill property tax reduction in Cameron Parish. This would save the average homeowner in Cameron Parish $1,841/year and the average business $2,952/year.

Baton Rouge, La. - Drawing from data on industrial tax exemptions released for the first time in the Louisiana Tax Commission's 2018 Annual Report, Together Louisiana has released a report examining the property tax impact in each parish of allowing industrial property that currently is exempt under a 10-year industrial tax exemption to return to the tax rolls after its exemption period expires.

Restoring tax-exempt property to the tax rolls would decrease rates because, under state law, any increase to the property tax base of a parish triggers a “roll back” of taxing bodies' ad valorem rates to the millage level generating the amount of revenue voters originally approved for that millage. Taxing bodies can vote to “roll forward” a millage to raise additional revenue, but the default, under state law, is a lowered rate with constant revenue.

The study does not assume all future industrial tax exemptions would be rejected. It assumes that exemptions would be approved for investments creating net new value — i.e. new plants or expansions -- but rejected for replacement-value exemptions (which are already disallowed in theory, but are common in practice).

THE REVERSE ROBINHOOD INDEX™

The report introduces a Reverse Robinhood Index™ to quantify the change, in mills, each parish’s property tax rates would experience if its tax-exempt industrial property is allowed to return to the tax rolls. The current costs of ITEP exemptions to each parish's homeowners and businesses -- and potential tax savings -- are calculated for every parish.

Download the full study here.