Teachers take on Exxon in Louisiana

4th of February 2020

Louisiana has the most generous tax-giveaway program in the nation, squeezing ressources from cities and school districts. When Exxon asked for more cuts, teachers in East Baton Rouge decided it was time to fight back.


Louisiana gives away the most corporate tax-deduction per inhabitant in the nation. Through the Industrial Tax Exemption Program (ITEP) the state gives away billions of dollars each year in local property taxes to hundreds of manufacturing establishments, including some operated by industrial giants such as BSAF, ExxonMobil and Valero. For decades this program has been completely unaccountable, relying on no research or data analysis proving its benefits. This changed slightly in 2016, when Democratic governor Edwards signed an executive order allowing local taxing entities, who are the ones losing revenues, to have a say in the approval of exemptions. For the first time ever, school board and other local entities can protect their revenues, and labor was not left blind to this change. A couple of union locals in East Baton Rouge decided they would now have a say in this process. They fought and stopped an unjustified and massive corporate giveaway, protecting their school districts, and bringing back social movement unionism to Louisiana.

Louisiana, with a population of 4.6 Million (25th, 2019) and a General State Product (GSP) of $255,000 Billion (24th, 2018) is a mid-size state. Its economy is defined by a very heavy manufacturing industry that might go unnoticed nationally. The manufacturing sector employees 6.81% of the state workforce, representing a decent 135,000 jobs, but shy of the 8.5% national average. In terms of proportion of the economic product, however, manufacturing accounts for a swooping 19.52% of the GSP, or about $49.22 Billion dollars in 2018, significantly more than the 11.6% national average. Compared to the rest of the nation, Louisiana ranks 4th in natural gas production, 2nd in crude oil refining capacity, 9th in crude oil production and 3rd in chemical production. Knowing the weight of the manufacturing industry in the state is important to understanding ITEP and the political and economical interests that have laid behind it since its creation.

The Industrial Tax Exemption program (ITEP) was created and inscribed into the state constitution in 1936. It endows a non-elected state-level board, the Board of Commerce and Industry, with the power to give manufacturing establishments significant tax exemption from local-level property tax. These give-away are some of the biggest of their kind, and by far the largest when calculated per capita. Just in 2017 ITEP exempted a total of $1.910 Billion in local property tax that would of otherwise went to local public services such as firefighting department, school districts, libraries, roads and parks… The main economic justifications for ITEP is as an incentive for corporations to settle and create jobs in Louisiana, but most exemptions go to corporations already established in the state and research shows that very little job creation can actually be traced back to the program. For in-depth research on the ITEP program economic impact read the research of Together Louisiana.

In 2016, John Bel Edwards, the democratic governor of Louisiana, decided to change some of the rules of ITEP after 80 years of total unaccountability. The most noteworthy transformation was the novel ability for local taxing entities, school boards, sheriffs and parish/municipality government, to approve, or reject, exemptions. ExxonMobil applied for a $2.9 Million exemption for its massive East Baton Rouge refinery in late 2018. This Refinery is a huge complex, the 5th largest refinery in the United States, and employee’s more than 6,000 workers. The specific work Exxon requested the exemption for had already been completed, which made it contrary to the “incentive” principle of ITEP. These millions of dollars would be directly withheld from local entities, including the East Baton Rouge School district which is already foregoing $28.1 Million in potential revenue due to recurring and unaccountable ITEP exemptions. The district was already in a tough financial situation, seeing Millions of dollars in deficit every year, and the teachers in the Parish had not received a raise in over 10 years due to the tight financial situation. In 2018-2019 Louisiana teacher’s pay was ranked 38th in the nation. This disparity between massive tax exemptions and struggling public services was not lost on the teachers unions.

The two teachers union of East Baton Rouge were joined by other public school workers at a special meeting, on October 23rd 2018, to discuss actions to stop Exxon from receiving more exemptions. The hearing at the Board of Commerce of Industry was to take place one week later on October 31st. Hundreds of energized teachers and school workers voted to walk-off the job on the day of the hearing by an overwhelming margin of 445-6. They planned to march to the Lasalle building downtown, where the Board meeting and the Exxon hearings were to take place and make their voices heard. It was shortly announced that the Exxon hearings were postponed, avoiding the walkout and public embarrassment for the state. The hearings took place at the next board meeting on December 14th and were easily approved despite vocal comments in opposition from teachers and community members present that day. The application was now to be considered at the local level by the East Baton rouge School Board. When the board gathered on January 17th 2019 pressure had been mounting. After months of lobbying by teachers and their unions, significant press coverage, and the community members watching, the board voted down the exemption by a historic 5-4 vote, in what amounted to an unprecedented blow to Exxon’s unquestioned hegemony.

It was predictable that Exxon would not be silent after such a turn of events. A statement was released expressing strong disappointment and annoyance at the new process: “unfortunately, the perception of Baton Rouge has become one of inconsistent treatment from one company to another, a lack of predictability and confusion among local elected officials, who are inundated with misinformation from activist groups […] We question if anti-business activist groups are opposed to the state ITEP rules or just opposed to ExxonMobil’s participation in the program.” The corporations then dropped its exemption request from the Metro council, avoiding another public defeat. Exxon, in partnership with industry groups is now trying to pressure the governor to limit some of the major changes to ITEP, especially the new power of local entities. Specific resistance has been shown towards local regulations that would automatically reject any tax-exemption application for work already started or completed. Governor Edwards is strongly considering banning these and taking power back away from local entities.

The teachers and school workers of east Baton Rouge have set an example of worker and community involvement in defending their public service and holding a major corporation accountable. The manufacturing industry, which plays a huge economic role in Louisiana, will not back down from the ITEP they know and love this easily. It will take constant pressure on city councils and school boards and massive education campaigns over the cost of ITEP to protect our schools and cities. The involvment of manufacturing workers themselves, recognizing the worth of their children’s education, playgrounds, and parks and the value of their local fire department, will be important to hold corporations accountable. But ultimately, the power of public service workers to expose the critical state of local ressources and institutions will be decisive in obtaining victories, as the East Baton Rouge teachers demonstrated.