No Taxation Without Representation – Property Tax Exemption Does Not Create A Fair Business Climate

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by Timothy Achan Gates, Covington Weekly Correspondent

While discussing the tug boats and tax revenue bonds, Representative Burns stressed to me the correlation with property tax exemption and federal money. The bonds are issued by the EDF (debtor) to the business (creditor) and the bond is paid off over an extended period of time (10 – 20 years) based on the specific industry of the bondholder. The EDF is a non profit corporation with governmental authority (the management arm of the District) over public money, including federal and state funds as well as a percentage of the hotel/motel tax.

A valid concern with the bond issues is the question of existing conflicts of interest. Last week, CW received a document describing a lawyer representing the EDF and EDD through an outside firm, who also holds membership on the boards of both said organizations. Our intention is not to scapegoat individuals, but to address the problems that exist in organizations that should be driving our economic development in a way that benefits the entire business community.

The issue of property taxes was raised at the last CBA meeting following the presentation from the parish Intergovernmental Communications Director. The basic question was, why do they keep going up? That is a question that is repeated over and over, from many business owners in downtown. A fair business environment should not include property tax exemptions that are only available to those with the most assets, or to favored business contracts.

Parish Councilman Jacob Groby recently made public a letter that was sent to the EDF with regard to the Folger’s factory in Lacombe. Mr. Groby received numerous questions and letters from his constituents with regard to the plant, and he details his own concerns in the letter. The Folgers plant is also a bond issue. While I was unable to find that particular property on the St. Tammany Parish Assessor’s office website, I did find that Diversified Foods, a multi million dollar business, paid $0 in property tax for 2013. The Southern Hotel, also a bond holder, paid approximately $1200 in property tax in 2013.

The highest grossing businesses are getting tax breaks and incentives to operate in St. Tammany with public dollars while the working class and small business owners are getting taxed more and more, and that is referred to as “economic development.” Wikipedia defines economic development as the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area, separate of economic growth. By this definition, the standard of living that is promoted in this specific area is that of the top of the pyramid, while the rest are left to struggle.

A better definition of economic development would include actions that spur economic growth for the entire community, not just a small cross-section. Businesses should contribute to the tax base in relation to what they gross. If everyone paid their share, we could experience a true economic boom, and enjoy tax cuts overall.

Timothy Achan Gates is a local musician and writer. Contact by phone is 985-288-9609 or e-mail at codexproventus@gmail.com