Another Louisiana Tax Give Away To A Multi Billion Dollar Chemical Company

Forget that Louisiana has vacant land, the Mississippi River, cheap labor, cheap energy (natural gas) an abundance of natural resources, a good transportation system of rail, water and truck, reasonable property taxes and a hosts of other positive  needs for business to survive.  But it is the unnecessary corporate welfare system of tax breaks and other special interest goodies that bring new business to Louisiana.

In a Times Picayune story of 7/18/14 by staff writer Katherine Bayre a chinese chemical company will build a Methanol facility on the Mississippi river in St. James Parish.  The facility will be completed in 2018 and employ 400 people.  Louisiana offered the following to the company to lure them.  (1) $9.5 million for infrastructure cost.  (2)  $1.75 million grant to cover some of the cost of leasing access to the riverfront and developing a terminal dock.  (3)  Tax breaks through Louisiana's industrial tax exemption and the quality jobs program.

The article states that the company, Shandong Yuhuang reported $4 billion in sales in 2013 and has 5600 employees.  Most of the methanol processed at the plant will be shipped back to China.  Approximately 20-30% will be sold to north American companies.  In orher words, Louisiana's taxpayers willbe subsidizing a $4 Billion company who will be shipping 70% of its product outside the U.S. back to China.

China, a country that has been dumping cheap goods, some of them toxic ones (such as sheetrock) to America and has cost many American jobs.  This writer does not have any problem with trade when companies pay their own way.  The thing that is lacking in this story is:  With all the financial aid being given to Shandong, will Louisiana insist that they use the best anti-pollution system on the market and available to make sure the plant is safe for the Louisiana environment?  The article is silent on this important matter.  After all we know China is the largest polluter in the world.

Some things never change in Louisiana and our elected officials are at the core of the status quo for doling out corporate welfare that is not needed to move Louisiana forward. Do tax payers really think Louisiana gets back the $8 billion of tax breaks doled out each year?  One would never think so with all the budget cuts Jindal says have to be made every year.


This commentary written by John Lucia




This commentary written by John Lucia.