How will Gov. Edwards’ change to a manufacturing tax break impact the industry long-term?
Louisiana’s manufacturing industry is earning middle-of-the-road grades, according to Conexus Indiana’s 2017 Manufacturing and Logistics Report Card, but a rewrite of a longstanding property tax break for Louisiana manufacturing facilities could change things.
Conexus Indiana is a private sector initiative focused on the manufacturing and logistics sectors of the economy. Its manufacturing and logistics report card is produced each year with the help of the Center for Business and Economic Research. The report card ranks each state on manufacturing industry health, logistics industry health, human capital, worker benefit costs, tax climate, expected fiscal liability gap, global reach, sector diversification, and productivity and innovation—all issues of importance for manufacturing site selection professionals. Here’s how Louisiana scored:
- Manufacturing industry health: C
- Logistics industry health: B
- Human capital: F
- Worker benefit costs: C
- Tax climate: D+
- Expected fiscal liability gap: C
- Global reach: C-
- Sector diversification: C-
- Productivity and innovation: D
Last summer, Gov. Edwards signed a set of changes to a tax incentive program for manufacturing facilities that intended to redirect the incentive to facilities that will create jobs and have local community support. Previously, new and expanding manufacturing facilities were exempt from paying local property taxes for up to 10 years through the Industrial Tax Exemption Program. Now the tax breaks are tied to job creation and retention and local government agencies impacted by the lost tax revenue get a say about whether the exemption is issued.
At this point, it’s still unclear how these changes will impact Louisiana’s manufacturing industry.