School Board says no to tax exemption for Metal Shark

CENTERVILLE — The St. Mary School Board on Thursday refused to offer a tax exemption for an expansion at shipbuilder Metal Shark’s facility.
Parish President David Hanagriff and Economic Development Director Evan Boudreaux asked the board for its consent to offer Metal Shark an incentive under the Louisiana Industrial Exemption Program.
When a new or expanding industrial enterprise commits to creating and maintaining a certain number of jobs, the program offers an exemption from 80% of property taxes on qualified capital investment for five years. The pro-gram also offers an option for another five years with an 80% tax abatement.
Under program rules that took effect in 2018, local governments affected by the tax exemption must give their OK.
To streamline applications, Hanagriff has obtained approval from St. Mary governmental entities to make the decision on exemption applications if the ad-ministration’s economic analysis shows a benefit. He told the board that the analysis of Metal Shark’s exemption application shows a small negative impact, so he approached local governments and obtained consent from the Sheriff’s Office and the Franklin city govern-ment.
But the sticking point for the School Board was the size of the expansion. According to information presented by Hanagriff and Boudreaux on Thursday, Metal Shark’s plans would result in two new jobs with a payroll of $73,000, and no indirect jobs.
With the exemption in place for the whole 10 years, affected governments would receive $26,918 over that time on the value of the expansion investment while giving up $98,970, according to figures presented by Boudreaux. That doesn’t count $42,291 in sales taxes collected the first year.
The School Board’s share of the property taxes collected on the expansion would be $10,673 over the 10 years. The exemption would amount to $42,692.
Hanagriff said he believes that the Metal Shark expansion will create more than two jobs. The job number on the application is low because if Metal Shark commits to a higher number and then fails to achieve it, the company would be required to pay back the money saved through the exemption.
“It’s very important that we’re pro-business in St. Mary Parish,” Hanagriff told the board.
But the board voted against the exemption by a voice vote.
On Friday, Boudreaux called the board’s action “incredibly shortsighted.”
“Moving forward, I hope the School Board will consider how businesses will benefit from the exemption,” he said.
He plans to go back to the Louisiana Commerce and Industry Board, which must also approve applications for the exemption, to see if the exemption can be applied to taxes that would be collected by other governments but not by the School Board.
“I’d rather have some exemption than none,” Boudreaux said.