ExxonMobil is not seeking their 2017 ITEP applications and the American multinational oil and gas corporation released this statement:
The ExxonMobil Baton Rouge Refinery and Baton Rouge Polyolefins Plant will not pursue their sites’ pending 2017 Industrial Tax Exemption Program (ITEP) applications due to ongoing local uncertainty surrounding the program. For ExxonMobil, there has been little predictability on ITEP contracts in East Baton Rouge.
Due to the uncertainty, we will have to assume there is no ITEP incentive as we make cost projections on future investment opportunities in Louisiana. As representatives of ExxonMobil’s Baton Rouge facilities, our role is to highlight the capital region as a strategic location for future ExxonMobil projects that could employ hundreds in the community.
Unfortunately, the perception of Baton Rouge has become one of inconsistent treatment from one company to another, a lack of predictability, and confusion among local elected officials, who are inundated with misinformation from activist groups.
We question if anti-business activist groups are opposed to the state ITEP rules or just opposed to ExxonMobil’s participation in the program. Our company has abided by the state ITEP rules. As the rules have changed in recent months, we adjusted our applications accordingly. Across the state, 54 other companies filed ITEP applications held over from 2017. Each company received state approval for their 2017 application.
The Louisiana Board of Commerce and Industry approved ExxonMobil’s pending ITEP applications unanimously in December 2018. These applications represent more than $64 million in 2017 competitive expansion projects, 18 jobs, and about a $600,000 a year abatement request for 10 years. In January 2019, the West Baton Rouge Parish Sheriff, School Board, Parish President and Council provided a professional and public review of the pending 2017 application for our Port Allen Lubricants and Aviation facility. It was approved unanimously.
The ITEP incentive rules that were in place at the time of the project decision helped attract these projects to Baton Rouge. An advance notice was filed on these applications in 2016, per the program rules at the time. The applications were held until new Baton Rouge ITEP guidelines were finalized and the governor promulgated the new ITEP rules. The Louisiana Board of Commerce and Industry unanimously approved these applications, since they adhered to the state guidelines. News Release With our decision to cancel these applications, our company must reassess previously-projected costs for these expansion projects.
This may include a reduction in investments that grow jobs, expand operations or support community projects. Our hope is that the current business environment will change to help us bring investment and jobs to this region when we need it most. We are proud to generate the largest property taxes in East Baton Rouge and in Louisiana and to be the largest manufacturing employer in the state.
Currently, the Baton Rouge Polyolefins Plant is considering a more than $500 million polypropylene project that would create dozens of new jobs. This potential project is a part of ExxonMobil’s $20 billion Grow the Gulf initiative. Since the initiative began in 2013, ExxonMobil has announced billions of dollars of investment in Beaumont, Baytown and Portland, Texas. New investment brings jobs and opportunity for everyone from local restaurants to workforce training programs like the North Baton Rouge Industrial Training Initiative.
We can’t wait to celebrate with 40 local students at tonight’s graduation. We appreciate the support from West Baton Rouge Parish Chamber, President, Council and School Board, the Baton Rouge Area Chamber, the East Baton Rouge Mayor-President and several School Board and Metro Council members.
We will continue our work to bring projects to our community. We owe it to our employees, hundreds of locally-owned business partners and tens of thousands of citizens who are connected to our facilities. A more predictable business climate must be at the heart of what we can accomplish together in years to come.
BRAC responded to ExxonMobil’s announcement with this statement:
ExxonMobil’s decision and statement today is a wake-up call. ExxonMobil has been the picture of corporate partnership, and extremely generous in their support of community groups, charities and nonprofits, most significantly to education and education charities. It invested $1 billion in capital investments in the last three years and pays $100 million in total Louisiana taxes annually. It employs nearly 7,000 people, and those jobs support nearly 1 in 8 jobs in our community. Nonetheless, community activists have targeted the ITEP program and this one company in particular with their derision, attacks and misrepresentations, fueling an anti-business sentiment today in our community. This toxic atmosphere led the school board to vote to oppose the company’s recent applications for additional investments. The tone has gotten to the point where this company has chosen voluntarily today to withdraw its application at a $6 million expense to the company, rather than continue to endure this circus.
Speaking from an economic development perspective, 15 years ago we saw this industry in serious decline, while manufacturing was moving overseas. Baton Rouge would have foregone millions to have the potential to turn things around, to save this industry and to attract new manufacturing investment to our community. Now, if we look ahead 15 years, what will we have? Will we continue to antagonize this industry, continue to tell them to stop investing? Will we see manufacturing decline again, only to shrink our tax base and jobs?
What signal will Baton Rouge send now? In the wake of recent announcements of manufacturing layoffs it is painfully obvious that East Baton Rouge must demonstrate that it wants manufacturing investment and jobs. If East Baton Rouge wants additional investments from ExxonMobil or other manufacturers, it must do so resoundingly and quickly.
All of this comes after the East Baton Rouge School board voted against Exxon Mobil’s ITEP exemption request.