At a Senate committee hearing last week, Together Louisiana and the state's assessors teamed up to deal an unlikely defeat to a proposed constitutional amendment backed by one of the most well-funded lobbying drives of the current legislative session.

House Bill 444 would have opened the door to a major new category of corporate tax exemption and had the backing, not only of the major players in the corporate subsidy lobby, but also of most of the state's associations representing local officials and even of the Governor, who was working actively to support the bill.

The bill was defeated in dramatic fashion on a 5 - 5 vote by the Senate Revenue and Fiscal Affairs Committee, after testimony by ordinary citizens appeared to turn the tide. The hearing gave a rare glimpse into the role the corporate subsidy lobby in Louisiana has played in expanding corporate exemptions and subsidies, the role local officials and their associations have played in that process and, apparently, what it takes to defeat that coalition.

Background
Late last year, a multi-national corporation, Cameron LNG, was seeking ways to avoid paying the full fare of their property taxes on their multi-billion liquid natural gas exporting facility in Cameron Parish. Cameron LNG already had received fifteen industrial tax exemptions worth $3.2 billion in property tax exemptions, but many of those were coming to an end, meaning the project would have to start paying hundreds of millions in property taxes on the project.

Instead of paying the taxes, Cameron LNG attempted to negotiate a major reduction in their future tax liability with local officials, through a cooperative endeavor agreement or "payment in lieu of taxes." Louisiana's Courts informed them that striking your own local, backroom deal on taxes was illegal and unconstitutional.

With their tax avoidance efforts declared unconstitutional, the local deal's backers set out to change the constitution, launching a massive, statewide lobbying drive behind a proposed constitutional amendment that would authorize property tax exemptions for any agreement arrived at with local officials (with no time limits or requirement to articulate benefits).

Within a few months, an army of lobbyists had won the backing, not just of the major players in the corporate subsidy lobby, but of most of the major local government associations and the Governor, to whom a tale was spun about how the constitutional amendment was really about giving money to local bodies and voluntarily building infrastructure (even though there is no evidence of either one of those activities in the bill itself).

In the end, it was Together Louisiana and the statewide network of assessors who won the day, arguing that tax avoidance of large corporations was not a good reason to blow a whole in the constitution.

Contributed Report