BATON ROUGE – Ascension Parish Public Schools Superintendent David Alexander believes an 80% property tax abatement for CF Industries’ proposed “green ammonia” nitrogen complex in Donaldsonville would lead to economic growth.
CF Industries produces fertilizer and said it is decarbonizing its ammonia production network to reduce greenhouse gas emissions, lending to Louisiana Gov. John Bel Edwards’s climate change goal of net-zero emissions by 2050.
The abatement would come from a state tax incentive initiative known as the Industrial Tax Exemption Program. If approved, the company would avoid paying 80% of the Donaldsonville complex’s property tax liability for up to a decade in exchange for the plant’s $122 million cost and five new jobs.
When asked whether property taxes could increase in coming years to offset the missing tax revenue – estimated at $7 million over 10 years – Alexander said the tax perk could “increase funds.”
“Abatements are provided to incentivize industrial growth and align with economic development initiatives at the state and local levels,” Alexander said in an emailed statement. “These incentives do not take away existing funds, but instead, provide opportunities for growth to increase funds that would have otherwise never existed.”
The abatement requires approval from Edwards; the Louisiana Board of Commerce and Industry, which signed off Oct. 27; and local taxing authorities, such as the Ascension Parish School Board.
Schools and other services are partly paid for through parish-wide millage rates, used to determine local property taxes.
Economists often are skeptical of tax incentive programs, citing low taxpayer return on investment.
The Louisiana Legislative Auditor recently presented audit findings for the state’s Quality Jobs incentive, saying the tax rebate program has produced less than half the expected jobs since its inception in 1995.
Edwards reformed the Industrial Tax Exemption Program in 2016 to allow local participation. The incentive was costing homeowners more than the state’s homestead exemption, he said.
According to an Ascension Parish School Board proposed resolution, CF Industries is committing to creating five jobs with average salaries of $100,000 a year. The state and local government “encourage” 50% of the project’s employees to come from the parish community, the document said.
The nitrogen complex will include a hydrogen generation plant that will produce ammonia in a way that reduces carbon dioxide. Construction is expected to begin this year and finish in 2023.
The Ascension Economic Development Corp. said the hydrogen generated at the plant will integrate into the company’s existing “ammonia synthesis loop” and enable 20,000 tons of green ammonia every year, leading to $9.7 million in direct tax collection over the life of the project.
If the agreement fails, the Louisiana Department of Economic Development and the parish school board “retain all rights to modify the terms and conditions of the incentive.”
The school board is scheduled to vote on the resolution Nov. 24.
By William Patrick for the Center Square
