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March 19, 2014You don’t inherit debt
March 19, 2014
In exchange for burritos and low-wage jobs, the proprietor of a pending Taco Bell could be in line for tax rebates and credits through a state economic development program.
The Lafourche Parish Council has signed on as the local sponsor for the incoming Raceland eatery to reap benefits of the state’s Enterprise Zone Program.
Morgan City-based B&G Food Enterprises plans to open a branch of Taco Bell, known for its fast-food interpretation of Mexican cuisine, at 4270 La. Highway 1. B&G is the franchisee of more than 80 Taco Bells from Texas to Mississippi, with 42 Louisiana locations, according to its website.
The council unanimously passed a resolution endorsing B&G’s participation in the Louisiana Economic Development program. Local lawmakers further agreed to offer B&G a limited local sales-tax break.
LED vets applications to ensure businesses applying for Enterprise Zone benefits qualify. With that considered, the Lafourche council typically endorses participation for all businesses that seek the parish’s endorsement, said Councilman Lindel Toups, who sponsored the Taco Bell resolution on behalf of the administration.
“We do it for any business that applies. It’s enticing people to come to the parish, and if we don’t do it, the next parish will,” said Toups, adding he doesn’t agree in principle with subsidizing development of fast-food restaurants.
Parish Administrator Archie Chaisson III said the parish evaluates Enterprise Zone requests but does not reject them, leaving that authority with state overseers.
“Those things are typically kind of rubber-stamp deals,” Chaisson said. “To say that we would throw one out and not take another, not really. Anything that comes in that is going to promote growth or promote employment, we’ll back.”
B&G estimates it will invest $1.1 million in launching the fast-food restaurant, according to advance notification it filed with LED. The Taco Bell would create 25 new jobs under a $425,000 payroll, according to the filing, which would put average yearly earnings at $17,000 per position. About 20 people would be hired for construction under a $700,000 payroll.
Created in 1981, Louisiana’s Enterprise Zone program with tax credits and rebates incentivizes creation of permanent jobs in economically distressed areas. Employers who seek the benefits must file advance notice before the project starts and have a set timeframe after its completion for filing formal applications.
For Taco Bell stores in various locations, B&G formally applied for the same benefits 10 times since 2008 and filed advance notice 14 times over the past six years, according to LED records.
Repeated attempts to reach B&G’s leadership for comment were unsuccessful.
Companies must create at least five new full-time (35 hours weekly) jobs in order to qualify. At least 50 percent of new employees must either reside in an enterprise zone, receive some form of public assistance, perform below a ninth-grade level in reading, writing or math or be deemed unemployable by traditional standards, according to LED. For this program, no distinction is made regarding the jobs’ quality.
Should the state approve B&G’s application, the company would receive a one-time $2,500 tax credit for each permanent full-time job created, a rebate of state sales taxes – 4 percent – paid toward purchases on machinery, furniture and qualifying materials and a 1.5 percent investment tax credit on the total capital investment.
Lafourche agreed to rebate all Solid Waste sales tax – 0.7 percent – B&G pays toward construction materials, machinery and other equipment purchased for the Taco Bell that will be permanently used on site.
Because it incentivizes job creation as opposed to business recruitment, the program is open to most existing and prospective Louisiana businesses not in gaming or residential development.
Louisiana’s employers have increasingly turned to the program for taxpayer money. Participants received $109.6 million in rebates and credits in 2010, up 232 percent from roughly $33 million 2001, a 2012 report by the state’s legislative auditor revealed.
The local burden has been far lighter. From 2004-12, 48 Lafourche businesses participated in the Enterprise Zone program a combined 82 times, but only two companies claimed three Solid Waste-tax refunds totaling $174,000 in that span, according to records obtained then by the Tri-Parish Times.
B&G Food Enterprises-owned Taco Bell along Houma’s St. Charles Street is pictured. B&G is seeking tax credits and rebates through a state program relative to a Taco Bell it plans to open in Raceland.
