Earlier this year, ExxonMobil officials said that Ascension and St. James parishes were in the running, along with a couple of other areas in Texas, for a multi-billion dollar petrochemical plant. Our state officials at the Louisiana Department of Economic Development immediately began doing everything in their power to bring this facility to Louisiana, but unfortunately, their efforts, while appreciated, were not enough.
On Wednesday, April 19th, we received the news that ExxonMobil had chosen to build this facility in — yes — Texas. This project is expected to bring 600 news jobs, 3,500 indirect jobs, and thousands more throughout the construction phase. Along with employment, the facility is projected to generate more than $22 billion of economic output while in construction and another $50 billion in the first six years of operation. Louisiana clearly missed out on what Texas Governor Greg Abbot calls, “a record-breaking project.”
This decision comes as no surprise. For years now, we have tried to fix our budget shortfalls by increasing the tax burden on businesses and industry, often our biggest job producers.
Louisiana had almost everything ExxonMobil was looking for to invest except for a positive business environment. Between the litigation against oil gas companies and the ever complicated, convoluted, and anti-business tax environment, you can’t blame them for electing to build elsewhere. These two factors have all but put a “posted” sign on our state borders for companies looking to make future expansions and investments.
Missed opportunities like this are only worsening our financial stability. Jobs are what we need in Louisiana to fix our budget. The State Legislative Economist, Greg Albrecht and the Commissioner of Administration, Jay Dardenne both said that in order to fix our state’s financial woes, we need to stop the uptick in unemployment. The more men and women that are working, the more tax revenue we will collect, yet, we continue to tax these job producing machines. We are adding insult to our own injury.
Thankfully there are some in our state legislature that understand the value of jobs in Louisiana. The Chairman of House Natural Resources and Environment, Stuart Bishop, has filed legislation, HB 461, that will incentivize oil and gas companies to invest in our state by lowering the severance tax rate on inactive wells from 12.5% to 6.25%. The bill goes one step further by reducing the rate to 3.25% for inactive wells that have been in the state’s Orphaned Well Program for five years or longer. This bill will help to draw in jobs and tax revenue all while lessening the financial burden on the state to plug these wells.
It is very disappointing to see Louisiana miss out on an opportunity of such great proportion. The Governor’s “fair share” rhetoric combined with his recent tax proposals that puts business and industry on the chopping block is not the way to attract business into Louisiana. If we want to fix our budget issues, Louisiana needs to simplify the tax code, stop the frivolous litigation, and get our hard-working men and women back to work.