Jefferson Parish gives company $80M tax break for nine 9 jobs
29th January 2024 · 0 Comments
By Wesley Muller
Contributing Writer
(lailluminator.com) — The Jefferson Parish Council approved its portion of an $80 million tax break earlier this month for a Japanese company that plans to build a chemical plant on the west bank in exchange for nine full-time jobs.
UBE Corp. plans to construct a facility that makes chemical solvents for electric vehicle batteries. The factory will be located at the Cornerstone Chemical Complex on the Mississippi River in Waggaman.
The subsidy comes from Louisiana’s Industrial Tax Exemption Program (ITEP), which offers industrial manufacturers huge exemptions on property taxes that local governments collect to pay for things such as public schools, drainage, roads, law enforcement and other services. UBE received state approval on its tax break from the Board of Commerce and Industry in December.
UBE’s first-year tax exemption will amount to $8 million. Under ITEP, companies get to claim the exemption each year for a maximum of 10 years, bringing the total value of UBE’s tax break to an estimated $80.8 million, according to Louisiana Economic Development records.
In exchange for the incentive, the company promises to create nine full-time jobs at the new plant with an average annual salary of $55,000. That average adds up to a total annual payroll of $495,000. The company estimates it will also create 300 temporary jobs during the construction phase.
Just prior to the vote, a parish resident notified the council members of a uniformed rubric the parish council, sheriff and school board each adopted back in 2017 that established rules and minimum standards on granting ITEP applications. UBE’s application failed to meet those standards, so the council rescinded the rubric.
UBE gave a presentation that suggested the project would create hundreds of millions worth of indirect benefits, though not all the council members bought into that argument. District 2 Councilman Deano Bonano pointed out that nothing in the ITEP agreement requires the company to bring jobs to Jefferson Parish as opposed to other areas of the state.
“Less than 50 percent of all Cornerstone employees work and live in Jefferson Parish,” Bonano said. “So the reality of the situation is, I don’t care if they create 100 jobs. The likelihood that 20 percent of those jobs are going to go to Jefferson Parish residents may be a high estimate.”
The money UBE plans to spend on construction and equipment will likely not flow to Jefferson Parish companies either, the councilman said.
“This is a specialized field,” Bonano said. “Trust me when I tell you that no company from Jefferson Parish is going to build this plant – nobody…This [ITEP] process is designed to benefit the State of Louisiana – not Jefferson Parish.”
Although Bonano criticized UBE’s ITEP application, he still joined with the other council members in a unanimous vote to approve it.
Jefferson Parish Sheriff Joe Lopinto has also approved his agency’s portion of the tax break. His decision to forgo millions in property tax revenue from UBE came despite appealing to the public for a 7-mill property tax increase in 2022 for sheriff’s office salary increases – an appeal parish voters approved.
The Jefferson Parish School Board had planned to hold a vote on UBE’s application on Jan. 10 but failed to do so because of a paperwork issue. The mixup caused the school board to miss a state-mandated deadline for local governments to respond to ITEP applications. The state Board of Commerce and Industry considers a local government’s silence as tacit approval.
This article originally published in the January 29, 2024 print edition of The Louisiana Weekly newspaper.
