A program that would allow Cameron Parish to start collecting annual payments from Cameron LNG now instead of waiting until the company’s 10-year industrial tax exemption runs out was ruled legally invalid on appeal.
The Cameron Parish Police Jury and School Board appealed a trial court decision to reject the PILOT program, short for “payment in lieu of taxes.”
Under PILOT, the parish would begin collecting a fixed amount — $503.5 million over the next 23 years — instead of paying an estimated $1.5 billion in property taxes starting in 2029, said Parish Administrator Ryan Bourriaque, although he noted that future property taxes are impossible to predict.
The tax assessor opposed the decision, arguing that the parish didn’t have the authority to exempt any company from paying the full assessed amount in property taxes. The 3rd Circuit Court of Appeal ruled in its favor.
Baton Rouge attorney Brian Eddington, who represented the tax assessor and defendant taxpayers, said the plan was doomed from the start because the parish doesn’t have the authority to reduce property taxes, only to adjust how they’re collected.
“We’ve always advised the parties proposing it that there are right ways to do this — this simply isn’t one of them, especially considering the magnitude of the reduction in taxes,” Eddington said.
Bourriaque said the parish needs money now to prepare for growth from industries like Cameron LNG, and that it sought to raise those funds through the PILOT. Bourriaque has long argued that collecting a smaller amount now is better than waiting for the possibility of a large payment later.
But he said the Police Jury hasn’t given up and will decide whether to appeal the decision on March 8. “We’re going to continue to work toward a resolution whereby the parish can get some funds up front,” Bourriaque said.
Eddington countered Bourriaque’s argument that residents wouldn’t see funds from Cameron LNG and other industries for the next 10 years, noting that both Cameron LNG and Cheniere Energy will be required to start paying property taxes on their import facilities starting in 2019 and 2020, when their 10-year exemption periods end. Property taxes for both facilities have not yet been assessed.
In its ruling, the 3rd Circuit noted that the sheriff didn’t join in the appeal, although he did in the district court filing. Sheriff Ron Johnson said he still stands by the Police Jury and the School Board “100 percent” but chose not to turn in a support brief on appeal.
Johnson said revenues from the PILOT would have funded law enforcement officers enough to adequately handle security at the industrial facilities, especially at a time when tax revenues are down because of the price of oil. He said the 10-year industrial tax exemption hurts local people by putting the tax burden on them during periods of growth.
The Calcasieu Parish Police Jury filed a brief with the 3rd Circuit supporting the PILOT program as an important precedent for the entire area, saying it, too, is considering a similar program and believes the law gives parishes adequate authority to do so.
Julie Nelson, Cameron LNG spokeswoman, released the following statement on the company’s behalf: “We remain committed to being a good corporate partner in Cameron Parish and we will discuss further actions, if any, with Cameron Parish soon.”
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