Dorothy Glover
July 30, 2007
Horace Scott
August 1, 2007Terrebonne Parish is thriving economically, so much so that many industries in the parish are nearly begging for skilled workers.
But Terrebonne still has to compete with Louisiana’s neighboring states of Texas and Mississippi to attract businesses.
Texas, a longtime business and political powerhouse, has, for decades, used its well-oiled economic development agencies to try to lure Louisiana businesses into relocating across the Sabine River.
Mississippi’s economy, usually counted among the slowest in the nation, has scored a few high-profile successes in recent years inducing new industry to move to the state.
Terrebonne Parish, for its part, made a great stride toward modernizing its capacity to attract new business to the parish when it created the Terrebonne Economic Development Authority (TEDA), headed by CEO Mike Ferdinand, in 2005.
Prior to the existence of TEDA, Terrebonne relied on the privately-funded Terrebonne Economic Development Foundation (TEDFo) to serve as the primary vehicle responsible for attracting business to the parish.
The foundation had been part of the Houma-Terrebonne Chamber of Commerce, but TEDFo’s operations were recently absorbed by TEDA.
Ferdinand said that the principal way Mississippi and Texas differ in their methods of attracting business to their respective states is that Mississippi uses a state-centered approach. Texas relies on its individual counties to establish local-government operated economic development agencies like TEDA to bring in new industry.
Jefferson Parish’s JEDCO and Lafayette Parish’s LEDA are two well-established local economic development agencies in Louisiana frequently mentioned as models for TEDA to emulate.
Nevertheless, Ferdinand said, Louisiana has a Baton Rouge-centered approach to attracting industry, spearheaded by the state-level cabinet department Louisiana Economic Development (LED), which resembles Mississippi much more closely than it does Texas.
“Texas has more community-to-community competition,” Ferdinand said.
LED offers several major inducements to businesses interested in setting up shop in Louisiana.
• Enterprise Zone tax incentives are aimed at situating businesses in economically underdeveloped areas. The incentives offer a $2,500 tax credit for each net new permanent job created during the first five years of the business’s operation, and a rebate of the state’s four per cent sales/use tax on the materials, machinery and equipment purchased during construction of a facility.
• The Incumbent Worker Training Program pays for businesses to enhance existing workers’ skills, or to train employees for new jobs within the company. The program recently began paying for companies in Louisiana to provide newly-hired employees with work skills training.
• The Quality Jobs Program rebates up to six per cent of a company’s annual payroll associated with new jobs created.
• The Industrial Property Tax Exemption Program abates local property taxes for 10 years on a manufacturer’s investment in buildings, machines, equipment and other properties that are part of the manufacturing process.
Louisiana does not levy a state property tax.
Mississippi Development Authority, the state’s equivalent to LED, offers grant and loan programs covering nearly any conceivable business expansion project.
( The Development Infrastructure Program makes grants to local governments to finance small infrastructure projects.
( The Job Protection Grant Program makes grants to “at risk” industries which stand to lose jobs that have been outsourced.
( The Existing Industry Productivity Loan Program offers loans to existing industries that have been operating in Mississippi for at least two years, and that meet other minimum criteria.
( The Mississippi Capital Access Program increases the availability of financing for small businesses having difficulty securing conventional loans.
Mississippi’s state-centered approach contrasts with the more localized stance Texas takes toward attracting economic development.
Since 1979, Texas has allowed its cities to create Economic Development Corporations to bring in new businesses and produce jobs.
Sachse, a city located northeast of Dallas, has seen its population grow from 9,800 in 2000 to 17,597 in 2006. Its median household income was a heady $69,200 in 2005.
The city set up the Sachse Economic Development Corporation (SEDC), funded by a local sales and use tax, as a means to attract business to the city, performing functions similar to that of TEDA, JEDCO and LEDA, except at the municipal level.
Like the Mississippi Development Authority, SEDC offers a large array of inducements for businesses to locate in the city.
SEDC can provide funding to practically any business promising to create jobs or expand the tax base in Sachse.
One of the biggest incentives offered by SEDC is Tax Increment Financing (TIF). Through TIF, the cost of improving a building, or enhancing the infrastructure, within a defined area is repaid by contributing all or part of future tax revenues attributed to the increase in property values caused by the improvements.
TIFs are also one of the major incentives offered by TEDA, along with money from Industrial Revenue Bonds and Revolving Loan Funds.
In fact, TEDA, like SEDC, can provide some benefit to nearly any businesses wanting to locate in Terrebonne Parish, thus broadening the tax base and producing job opportunities.
One of the most attractive incentives being examined by TEDA are Community Development Districts (CDDs), which are similar to the Municipal Urban Districts (MUDs) found in Texas.
“CDDs are potential opportunities that have not been explored in Terrebonne Parish,”
Ferdinand said. “They allow developers to access low-interest funds to develop infrastructure.”
The district would issue bonds to finance water and sewer services, and recreational amenities.
The district could “help private developers have access to municipal bond rates,”
Ferdinand said. ‘It’s a cheap way to finance infrastructure. Land is put up as collateral.”
“We compete with both Texas and Mississippi,” he concluded. “They have different philosophies.”
