An Orleans Parish School Board committee declined to weigh in on a business’ request for a five- to ten-year property tax exemption under the state’s Industrial Tax Exemption Program despite the school district administration’s recommendation to deny it. Instead, the budget committee moved a motion to deny the request to the full board, which meets later this week.

If approved, it would be the first such denial from the Orleans school board, which has only recently been given the power to review industrial tax exemption requests.

It’s not clear if that will happen. The recommendation to deny the exemption was based on a set of standards that the school board approved over the summer. However, as part of that summer vote, the school board also agreed to defer to standards formally adopted by all citywide taxing bodies, including the city and the Orleans Parish Sheriff’s Office.

Those standards have not been adopted yet. And on Tuesday, a spokesman for Mayor LaToya Cantrell told The Lens that until they are in place, exemption requests “should be allowed to move forward.”

The request from Bollinger Algiers, a subsidiary of shipbuilding and vessel repair firm Bollinger Shipyards, did not meet two of the district’s four requirements to secure an exemption, according to the notes in a board resolution to deny the exemption.

”Until the new process is in place, we believe it’s fair that requests such as Bollinger Algiers’ request — which was submitted under the old system — should be allowed to move forward.”—Beau Tidwell, spokesman for Mayor LaToya Cantrell

It’s unclear what project or Bollinger property the exemption would apply to. The company did not return a phone call, and school district officials did not immediately respond to a question from The Lens.

The industrial tax exemption is the state’s most expensive tax break, costing local governments $13.7 billion in lost tax revenue between 2006 and 2016, according to The Advocate.

The exemption has allowed eligible manufacturers to forgo all property taxes related to new facility improvements for up to 10 years. That was recently capped at 80 percent of property taxes for 10 years, but because Bollinger applied for the exemption before the rules changed, it is seeking a 100 percent exemption, emails from the company show.

The request involves a small amount of money. The tax break would cost the city about $1,300 each year for the first five years and $3,000 each year after that, school district Chief Operating Officer Eric Seling said. But the schools’ share represents about 30 percent of the total value of the exemption. Seling said the district is still calculating an exact figure for its portion.

Even though the exemption affects local property taxes, industrial tax exemptions were approved by a state board, without local input, until 2016. But under two 2016 executive orders from Gov. John Bel Edwards, local agencies — such as school boards and police districts — can vote to keep their portion of the taxes.  It appears the first local agency to reject the tax break was the Caddo Parish Sheriff’s Office in February.

Earlier this year, with growing momentum across the state, school board member Ben Kleban proposed denying all ITEP requests. But that idea didn’t pass muster with other board members and the business community. In July, the board instead created criteria for approving and denying the requests — applicants must meet all four requirements.

Quentin L. Messer, Jr., CEO of the New Orleans Business Alliance, said in a prepared statement that the process is working as the governor anticipated, with decisions being made at the local level.

“The challenge is to strike the balance between maintaining Orleans Parish economic competitiveness relative to neighboring parishes and allowing OPSB, the Sheriff’s Office and City of New Orleans to develop policies reflective of their stakeholders’ concerns and priorities,” he said.

The Bollinger application didn’t meet two of the school district’s four criteria. It is not an economically “distressed region” as defined by the school district. And construction has already begun. The criteria require that projects cannot have started before getting approval for the tax exemption.

At the July meeting, Kleban said the school board’s criteria were adopted after consulting with Cantrell’s office. But on Tuesday, Cantrell spokesman Beau Tidwell said the city “is still in the process of developing a procedure for reviewing ITEP requests,” which will be done in collaboration with the school board and the sheriff’s sffice.

Bollinger has also submitted requests with the city and the sheriff’s office for exemptions on property taxes they oversee.

“Until the new process is in place, we believe it’s fair that requests such as Bollinger Algiers’ request — which was submitted under the old system — should be allowed to move forward,” Tidwell said.

A Bollinger employee emailed school district employee Sue Robertson in mid-September requesting the tax break, according to documents. The project is called “2017 Expansion.”

The school district also requires projects to meet job and payroll requirements of the Louisiana Quality Jobs Rebate program. And at least 35 percent of new hires must reside in Orleans Parish or attend or have attended Orleans public schools.

Since 2000, government bodies in New Orleans have forfeited $210 million to the Industrial Tax Exemption Program, according to an estimate contained in Kleban’s summer proposal. That included $68 million for New Orleans schools.

In mid-September, the East Baton Rouge Parish School Board approved a tax exemption for ExxonMobil after an economist hired by the board called it a good investment.

The committee voted to send the resolution to the full board without a recommendation. The board meets Thursday.

This story has been updated to include remarks from Mayor LaToya Cantrell’s Office

Marta Jewson

Marta Jewson covers education in New Orleans for The Lens. She began her reporting career covering charter schools for The Lens and helped found the hyperlocal news site Mid-City Messenger. Jewson returned...