Amendment 5 to allow “PILOT” agreements controversial

Updated: Oct. 26, 2020 at 7:54 PM CDT
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LAKE CHARLES, La. (KPLC) -Local business leaders recently endorsed amendment number five which would allow what they call payment in lieu of taxes.

It’s a proposed constitutional amendment that has organized opposition by citizens who think Louisiana gives away too much for what it gets:

The idea of payment in lieu of taxes seems simple. Do you want a lump sum up front or a larger amount over many years? It’s kind of like do you want to buy a house today-- or wait for years until you can save up for one.

State Senator Mark Abraham who sponsored legislation to put it on the ballot thinks it’s good for industry and a good option for local government.

“It’s just if you can agree. So, it’s just a tool in the tool chest. And it should be supported by local government because it’s your opportunity to get some badly needed dollars that you don’t' have any other way to get and at the same time it helps industry be a good corporate citizen.”

“So, don’t let that word, payment in lieu of taxes scare you and make you believe that the industry gets off scot free for property taxes because that’s not the case,” said Abraham.

But there is organized opposition to it by citizens who think the state doesn’t get enough bang for its buck when it gives tax breaks to industry. Retired General Russel Honore is a major opponent.:

“Amendment 5 will be a disaster for Louisiana. Our current itep program (industrial tax exemption program) is not fair to the poor people of Louisiana because politicians get to negotiate tax breaks to industry,” he said.

The local Chamber Southwest Louisiana endorsed the amendment. President and CEO George Swift says Louisiana does compete with other states for industries.

“I can assure you industry will not come here automatically. In case anyone has not noticed, we’re right next door to Texas and they have ship channels and they have pipelines and they have industrial sites and they’re very competitive,” said Swift.

But-- Honore and others call it corporate welfare that exempts large oil and gas companies from paying their fair share.

“Right now, the taxes that belong to the people, they’re letting the company have it,” said Honore.

A yes vote gives local governments the authority to negotiate agreements with individual companies for upfront payments that would reduce what they pay in the future.

A no vote leaves things as they are which means no payments in lieu of taxes.

For more information on all seven amendments and the sports wagering proposal visit the Public Affairs Research Council.

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