International Paper will invest up to $52.2 million to modernize the paper mill in Bogalusa, a manufacturing mainstay of Washington Parish for more than a century. While state officials praised the company for the investment, an organizer with Together Louisiana, a statewide network of congregations and civic organizations, said corporate moves that involve huge tax exemptions “need more scrutiny.”
The state of Louisiana offered International Paper a “competitive incentive package” that includes a $500,000 Modernization Tax Credit. The company also is expected to utilize the Industrial Tax Exemption Program. ITEP gives manufacturers an 80-percent reduction on property taxes for 10 years if they build new facilities or expand existing ones.
The modernization program would increase the paper mill’s efficiency by upgrading the recovery boiler system, along with filtration, condenser and acid system enhancements in the papermaking process, according to a press release from Louisiana Economic Development.
“We congratulate International Paper for improving the competitiveness of its Bogalusa Mill and for investing in the future of IP employees in Louisiana,” Gov. Edwards said in that press release. “This commitment to Bogalusa and Washington Parish represents a significant project win for our entire state and reinforces the great strength of Louisiana’s forest products sector.”
Washington Parish President Richard Thomas Jr. said in the press release that the economic impact of continuing business with International Paper is “very important not just to the City of Bogalusa but to the livelihood of our parish.”
“We are fortunate to have International Paper – one of the world’s leading producers of renewable, fiber-based packaging, pulp and paper – as an industrial citizen in Washington Parish,” said Thomas. “International Paper’s forward-thinking vision for modernization is the reason they have remained stalwarts in our community. Their continued commitment to investing in upgrades has allowed the competitive production necessary to maintain a stabilized workforce.”
The governor doesn’t say anything in his press release about International Paper hiring more people. He says the company “plans to retain the mill’s 492 direct jobs.”
Broderick Bagert, an organizer for Together Louisiana, which has opposed corporate tax breaks that divert money from public education and other community services, said there has to be more public scrutiny of subsidies for projects that aren’t creating jobs, only retaining them.
“If you start regularly giving out tax exemptions that just ‘retain’ their existing workforce, then you’re moving back toward being a rubber stamp in a corporate welfare program,” Bagert said.