Communities Want a Refund
A black and white illustration of egrets standing in dark water in the marsh, with oil refineries in the background. There are two egrets and they are facing away from each other. The water is black, and there’s grass on either side. In the background is a fence, and beyond the fence is an oil refinery. The structures are all white and the sky is black. At the bottom reads “St. John Makes, Marathon Takes: Communities Want a Refund” in gray letters. Illustration by Pippin Frisbie-Calder.

The Marathon Garyville Refinery is a fortress of smokestacks and towers that occupies about five square miles of former sugarcane fields on the Mississippi River. Its footprint overlaps with the land of San Francisco Plantation House, whose 1850’s steamboat-style mansion was purchased and refurbished by the company in 1976. As San Francisco operates tours and weddings under oak trees, the refinery above churns 578,000 barrels of crude oil each day into gasoline, diesel, kerosene, asphalt, propane, sulfur, propylene, and more. From a dock on the river, the refinery ships its products downstream and across the globe.

By far the main economic engine of St. John the Baptist Parish, Marathon employs over 900 people, helps fund the community college, and is the single largest taxpayer in the parish. This year the company paid $57 million in property taxes, and though this represents over 50% of the parish’s property tax base, they may in fact owe more than that. According to local activists, the company has fraudulently manipulated the state tax exemption system to try and lower its property tax obligations to St. John the Baptist Parish. Despite Marathon’s economic and political power in the parish, St. John residents are fighting to hold the company accountable, pushback that is part of a broader—and largely successful—backlash across the state against the embattled Industrial Tax Exemption Program (ITEP).

That subsidy has been the cornerstone of Louisiana’s economic development agenda since the 1930s. According to the program’s rules, it gives generous property tax breaks to a wide variety of industrial actors in exchange for a non-binding “commitment to jobs and payroll in the state.” As the single largest corporate subsidy program in the United States, ITEP exemptions are awarded in Louisiana at 10 times the national average per capita. Between 2006 and 2016 alone, the program kept $13.7 billion in the hands of businesses at the expense of local governments, according to an extensive investigation by The Advocate.

ITEP has become a rallying cry for a diverse array of groups across the state, which culminated in a resounding statewide defeat of the program in November. Amendment 5 would have expanded ITEP exemption options for businesses but was rejected by 62% voters at the polls. The defeat has been called a moment of populist backlash against the traditional power dynamics of Louisiana, especially after the amendment had passed the state House and Senate with a bipartisan 86% of legislator’s votes.

Together Louisiana is a grassroots network of churches and organizations from across the state that has long fought to reform ITEP. The group has made headlines for its cross-state, block-by-block effort to defeat Amendment 5 and has since turned to the Louisiana Board of Commerce and Industry in Baton Rouge. The board has historically been responsible for handling ITEP applications and was faulted by Together Louisiana for approving a startling proportion of the exemptions: 99.95% of applications were approved by the board across two decades. Together Louisiana organizers brought the fight into the board’s November meeting, where they described the apparent falsification of Marathon’s ITEP application—worth $43 million—from within the state department’s own database. The accusations were serious enough that the board deferred the decision to a future hearing and called for a forensic investigation of the application system. 

Broderick Bagert is an organizer with Together Louisiana. He says the Marathon ITEP debacle is a clear example of Louisiana Economic Development (the state agency in charge of ITEP) and the Board of Commerce putting profits before populations. “[LED] often acts like an agency acts when it is captured by industries… like it’s representing [industry] interests, and not representing the people of the state.”

For Bagert, a New Orleans native, it’s a matter of basic democractic principles that communities should be able to choose how to manage their own tax base, whether or not to incentivize businesses, and ultimately how to grow their own economies. ITEP has historically removed control of local taxes from parish councils and school boards, and placed it instead with the Board of Commerce and Industry in Baton Rouge. “The kind of justice opportunities that are created just by continuing to have local communities control their own resources, that’s a huge part of what I think is important,” says Bagert.

The Industrial Tax Exemption Program was born in the wake of Huey P. Long’s assasination. The reins of Louisiana’s share-the-wealth populist movement were passed to Governor Richard Leche, who responded by saying, “When I took the oath of office, I didn’t take any vow of poverty.” Leche became known for loosening restrictions on the oil industry, passing ITEP in 1936, instituting a sales-tax-heavy, regressive tax scheme, and becoming the first of the state’s governors to go to prison (on charges of corruption and mail fraud).

Forty years later, Marathon’s Garyville Refinery was built. In 1977, Louisiana was desperately trying to lure new manufacturers to the state, and ITEP was a major tool in that scheme. The program removed 100% of a company’s property from the tax rolls for a full 10 years. That means that a Garyville student who started second grade in 1977 and lived and breathed downwind from the refinery would see almost no tax benefit from the company until she graduated from high school. On top of that, ITEP exemptions could be given for upgrades in existing plants. This meant that when a company like Marathon faced the end of a 10 year exemption period, the company could just install new equipment and reapply, again, for 100% tax breaks for 10 more years. This pattern effectively kept large proportions of lucrative industrial properties, like Marathon, off of local tax rolls perpetually.

Marathon has expanded massively, and ITEP has helped fund it. Initially built with the capacity to process 200,000 barrels of oil per day, the refinery completed its latest $3.9 billion expansion in 2009. This made it the largest refinery in Louisiana, the third largest in the United States, and the 10th largest in the world by capacity. As late as 2017, 40 years after the plant’s construction, 88% of the Marathon’s property was considered tax exempt as a result of ITEP.

Dr. Joy Banner grew up across the river from Marathon. As a child she thought the twinkling refinery and other nearby plants were rather charming at night. “They look like little cities,” she says, laughing a bit, “They’re all lit up. They’re actually pretty.” Her family has been in St. John the Baptist Parish since the 18th century, and they have witnessed its transformation from sugarcane riverlands into the international manufacturing and trading hub that it is today. “And not only watched it,” she says, “but that’s where my parents worked. My parents retired from plants.” 

She doesn’t shy away from talking about the complexity of the petrochemical industry in the River Parishes, noting that the plants were seen as a lifeline for many coming from sugarcane work. “I don’t think people saw the development as a bad thing. It was being pitched as something that was good for the community and you’d have good jobs and benefits, and it did. It did produce higher incomes for the Black population.” In 1977, the year the Marathon Garyville Refinery was completed, she says, “You literally had people that were still living on the plantations, almost until the 1980s. The work was very difficult, you had children that stopped going to school because they were needed to help in the sugarcane fields to help with their families’ overall income.”

Her parents’ jobs in petrochemical plants helped send Banner and her four siblings to private schools while allowing the family to stay in a tight knit community. Eventually Banner got her PhD in communications from LSU. She has taught business, marketing, and entrepreneurship, among other teaching and small business development roles. Today, she says, “I still live in the neighborhood my parents live in, and so do my cousins. It’s basically a family compound, really. We come out in the evening and we sit outside. We walk, or I go bike on the levee.” It is this multigenerational land-based dynamic that makes St. John the Baptist Parish unlike so many places in America. “Shooting the breeze outside,” she says.

But even though the influx of industry has increased the incomes of so many Black families like her own across the River Parishes, she says the parish is still stuck. The poverty rate remains high (16% in St. John Parish compared to the national average of 10%). One community in St. John faces a cancer risk that is 50 times higher than the national average. And as more petrochemical developments are planned, neighborhoods are impacted as the air grows more polluted. In April, when COVID-19 death rates were higher in St. John Parish than anywhere in the United States, a conversation about industry’s role in community health became unavoidable. “It ravaged our parish,” says Banner, “And that opened up people’s minds, just a little bit, to thinking that [the environmental justice groups] Rise St. James and Concerned Citizens of St. John Parish are justified to have these conversations.” 

As an advocate for small business development and tourism, Banner says she is stifled by industry leaders, who are layered across properties, parishes, and governmental boards and have a tight grip on any type of development that is not petrochemical. “I don’t think people understood the chemical plants as being as extractive as sugarcane work,” she says. “To me, it’s just this mindset and culture of protecting industry even when industry is not working for us. Clearly the money is staying at the top.”

Between 1998 and 2017, the Board of Commerce and Industry approved 260 ITEP awards in St. John the Baptist Parish, resulting in the loss of $919 million in property taxes to that exemption program. When Together Louisiana analyzed LED economic impact data from that time period, they found that the awards generated a net total of 22 jobs, meaning that each job was subsidized with $41 million of taxpayer money. A similar investigation in The Advocate found that ExxonMobil lost 1,900 jobs in Baton Rouge while benefiting from $700 million in ITEP awards over two decades.

While Marathon was exempted from paying property taxes to expand their operation, property values in fence-line communities decreased. In 2016, St. John the Baptist Parish School Board member Ali Burl warned that Marathon and two other growing petrochemical facilities were threatening the very existence of the small riverside towns that neighbor them. He described steady chunks of the town of Mt. Airy claimed for tank farms and river transport terminals. Almost the entire town of Lions, save its cemetery, was bought out by Marathon in 1975. A thin strip of above-ground crypts now sits within a maze of pipes, a tank farm, a parking lot, and other refinery buildings. He warned that if the development goes unchecked, Garyville and Mt. Airy will go the same route. 

Dr. Beverly Wright, an environmental justice scholar, writes that the biggest victim of this scenario is public education. “Since the exemption relieves businesses of local property taxes, operating funds to maintain local roads, parks, libraries, and schools are not received by local governments,” she says. Her sentiments echo Senator Cleo Fields: “We’re the only state in the US that lets education subsidize business.” 

For years, legislators tried to shield school boards from the effect of ITEP on their budgets in the same way states like Texas and Alabama shield local education funds from business incentives. But reforms were rebuffed by Louisiana’s powerful business lobby. So the ground practically shook when Governor John Bel Edwards, in a 2016 executive order, removed the Board of Commerce and Industry as the judges for new ITEP applications. The order instead gave local school boards, parish and city councils, and sheriff’s offices the power to decide whether their share of taxes would be exempted or not. He also lowered the maximum exemption to 80% of a company’s investment. Early in 2019, the East Baton Rouge Parish School Board made news when it rejected Exxon’s $2.9 million ITEP application. St. Bernard Parish followed, rejecting exemptions for the Chalmette Refinery. The New Orleans City Council recently rejected all four tax exemption applications for the Folgers Coffee Company. 

In November of 2019, Marathon Petroleum asked the St. John the Baptist Parish School Board, parish council, and sheriff’s office to exempt $25 million of refinery property for work that the company had already completed. It was the first time in Marathon’s 42 years of operation that Marathon’s tax breaks would go before the local government. The sheriff’s office did approve its share of the tax breaks. All but one member of the school board and parish council, however, rejected the exemption. 

In this new era of ITEP rules, it surprised organizers from Together Louisiana when, in November 2020, a Board of Commerce and Industry agenda included an ITEP application from Marathon for a new $43 million exemption. Marathon had applied for a 10 year property tax exemption based on 2018 upgrades to the refinery. “The problem,” said Bagert, “is that the application should have gone before local officials in St. John the Baptist Parish, whose property taxes are being exempted, not the state board in Baton Rouge.” The falsification, organizers allege, must have occured when someone with access to the state’s online application system filed the new Marathon application with a completely different project from before Edwards’ reforms.

Because projects filed before Governor Edwards’ executive action are grandfathered into the old rules, this alleged backdating would have given Marathon a more favorable chance of winning the exemption by routing the application through the Board of Commerce and Industry, rather than through the St. John the Baptist government.

“One story is corporations scrambling to get the goodies they’ve been getting for so long, and doing increasingly desperate things to do it. Like commit fraud apparently,” says Bagert. “The other is, they’re doing that because ITEP has really changed. And those changes are now bearing gigantic fruit.”

Joel Waltzer, an attorney for Together Louisiana, told the board at the November meeting, “LED is either aiding or abetting in some attempts to abuse the system or again failing to conduct even a basic check of facts.” He argued for the immediate denial of Marathon’s exemptions.

In an emailed statement, Louisiana Economic Development Secretary Don Pierson told ANTIGRAVITY: “Pursuant to the Louisiana Board of Commerce and Industry’s December meeting, LED staff is reviewing the ITEP documents in question and is determining the historical record for the project. We will report to the board when that work is complete but there is nothing to suggest that LED staff engaged with the company improperly.”

Bagert believes that the discrepancy was deliberate and not a clerical mistake. His suspicions are based on Together Louisiana’s research of the LED database before the board meeting. Together Louisiana had downloaded LED’s entire database of ITEP applications as they stood in 2017. They compared Marathon’s current $43 million application, known in the system as an “Advance Notice,” to another Advance Notice filed under the same eight digit number in 2014. “How do we know it’s fraud?” Bagert says, “We know what the original Advance Notice says. And we know that they emptied that Advance Notice of content and stuffed a project that was initiated three years later into that empty shell.”

Board members appeared shocked at the allegations. Louisiana Economic Development’s executive counsel, Tam Bourgeois, said that the information had only reached her office the day before the meeting, which hadn’t allowed any time to investigate. She told the board there was “no indication that any changes were requested after the locals rejected Marathon last year.” When a board member asked her if LED would “forensically look and see who made the changes and why they were made,” Bourgeois said, “I think so, I can’t make any promises.” That same board member pushed back, saying “I’d like to make a request please, as a member, if you could get this information to me and to the rest of the members: when, how, and who authorized the changes, determining how this change was made.” The next meeting of the Board of Commerce and Industry is January 29, 2021. 

“I think it’s very telling that in this state,” says Bagert, “that if you take $500 from a convenience store, you spend years in jail. But if you fraudulently change public documents in order to take $43 million from public school kids and other public services, it gets treated like, ‘Well maybe it was a clerical error. We’ll let you know!’ It’s a pretty deep and telling discrepancy.”

When a program like ITEP systematically removes the ability of local government to manage basic taxation policies, it leaves community members disenfranchised. This and the power dynamics of South Louisiana’s industrial landscape raise some weighty questions. How is it possible that a place so rich in resources can remain so desperately poor? Is it possible to envision a future here without extraction?  While the work of groups like Together Louisiana may not have all the answers, the region’s survival may depend on their courage in confronting such powerful global industries (and deep-rooted local systems that protect them). The more people fight for self-determination, the more  industries are forced to participate in the larger process of redefining our relationship to this land.

The plants and plantations along the Mississippi River beg the question of what growth is, who it benefits, and how growth should be cultivated. With the return of ITEP decisions to local control, communities across Louisiana find themselves at a small but important moment of reckoning about their own growth. Dr. Banner sees these themes as repeating throughout the history of Louisiana. “After the Civil War when the formerly enslaved were trying to negotiate a work agreement, their primary desire was land and to be independent,” Banner says. “They called wage work ‘wage slavery.’ They didn’t see much of a difference between getting paid a salary and still being enslaved. They were always willing to work, but they wanted their own land and to be able to do their own work for themselves, not be dependent on someone else. That would be considered very progressive by today’s standards, but that’s embedded in our culture.”

illustration by Pippin Frisbie-Calder