The Orleans Parish School Board unanimously denied six tax exemption requests from Folgers Coffee Company — totaling about $2.9 million in local property taxes dedicated to schools over 10 years — at its virtual Thursday evening meeting.
Their strong position — mirroring the majority of the evening’s public commenters — stood in stark contrast to the New Orleans City Council, which earlier in the day voted to deny two of six exemptions but deferred a vote on four others.
“I’m glad this board, at least, is leading the way,” Lauren Lastrapes, a teacher at Ben Franklin High School said during public comments at the school board meeting encouraging members to deny the exemptions.
The City Council’s decision came a day after one of the largest community groups advocating against the tax breaks — Together New Orleans — issued a correction to its widely publicized financial impact forecasts of Folgers’ request under the Industrial Tax Exemption Program. ITEP allows companies to skip paying up to 80 percent of their taxes on investments they make to their properties for up to 10 years.
The exemptions voted on Thursday evening only affect the school board, but Folgers is seeking multiple tax breaks, worth roughly $25 million in total local property tax breaks over 10 years. That includes the taxes that go to the schools, as well as the city of New Orleans, the Sewerage and Water Board and several other local government agencies.
Earlier in the week, NOLA Public Schools district Chief Financial Officer Stuart Gay told board members that district could not “fiscally tolerate” the loss of any additional revenue, especially in light of the COVID-19 pandemic which has gutted the city’s tourism economy, driving down anticipated revenue.
While a Folgers representative again called for the vote to be deferred due to “misinformation,” the majority of people commenting supported a denial of the tax break.
Ken Ducote, a former district employee who now heads a charter school collaborative, supported the denial.
“The number one issue in attracting more and better businesses to Orleans Parish is that we have a better education system,” Ducote said, noting he’d worked on many campaigns to increase school funding. “At no time, in any of those elections that I worked on, was the importance of having tax exemptions any part of that conversation. You have a fair, reasonable, prudent policy for when you will consider giving exemptions. And as long as you are applying that policy consistently … we will support you in that effort.”
Teacher Jennifer Molena made the same point.
“I hear often that the business community laments the state of education in our city,” she said.
“Our schools are drastically underfunded. Because of COVID-19, Warren Easton was finally able to provide our students with laptops — this is something that they should have had a long time ago,” she said. “All of our teachers are concerned about declining tax revenue and what it will mean for technology and our students who need remediation.”
Retired educator Dave Thomas acknowledged the financial forecasting error made by Together Louisiana — but, he noted, it didn’t involve the district’s criteria created in 2018 for allowing approval.
“There has never been any challenge of the criteria that were used,” he said. “I encourage you to stay the course.”
Historically, the ITEP tax breaks were approved by a state board, without any formal local input. But the property tax breaks affect local governments’ budgets. And in recent years, local agencies have been afforded more power to oversee the exemptions coming from their coffers.
Folgers is actually applying for six separate tax breaks for six investments they’ve made to their facilities in eastern New Orleans. The first two were completed in 2018, the second two were completed in 2019 and the last two already commenced in 2019 and will be completed next year.
None of the six exemptions Folgers was seeking met the job requirements the district has created for evaluating ITEP requests. In addition, the construction projects that were the subject of the requests were completed or underway. The district requires projects to gain approval prior to construction beginning.
In the final meeting for four Orleans Parish School Board members, all seven voted unanimously on each of the six tax exemptions.
Board members wished each other farewell in heartfelt speeches.
The new board will be sworn in on Jan. 11.