Last Modified: Wednesday, April 24, 2013 11:11 PM
The Calcasieu Parish School Board budget committee on Tuesday voted down a request to renew a $600,000-per-year sales tax credit for Aeroframe Services because the renewal was not in the best interest of the system, which faces a $13 million deficit next fiscal year, a committee member said.
“Aeroframe is using our workforce and making good money and are virtually tax exempt. After 10 years it’s time for Aeroframe to pay their fair share,” R.L. Webb, District 1 board member, said Wednesday. “The problem is that the School Board is hurting for money with our deficit. We need the tax dollars.”
In 2003, the School Board approved a $5,000-per-employee tax credit for each Chennault International Airport facility that repairs or refurbishes aircraft or related components. More than $5.4 million has been exempted since 2003. The arrangement expires at the end of May.
Karl Bruchhaus, the school system’s chief financial officer, told the committee on Tuesday that the agreement was made “in a different economic climate than we are in now.” But he recommended the committee renew the credit.
The estimated value of the credit would start at $600,000, or 100 percent of $5,000 per employee, and decrease by $120,000, or 20 percent of $5,000 per employee, each year for the next five years. Bruchhaus said the plan would allow the industry, and especially the vendor, to plan accordingly.
The committee, which voted 11-2 not to extend the agreement, included all but two board members, who were absent. The committee will make its recommendation to the full board May 7.
Randy Robb, executive director at Chennault, said Wednesday that the committee’s decision was “ill-advised,” and he plans to be at the next board meeting to explain the importance of renewing the tax exemption.
“This type business is very competitive, and the margins are wafer thin,” Robb said in a prepared statement to the committee. “Therefore, this renewal is crucial because a tax burden at this time will cause an undue hardship on our expanding business.”
District 5 board member Dale Bernard supported the tax renewal, along with Annette Ballard of District 4.
“I certainly don’t want us to dig a deeper hole, but I don’t think $600,000 will make that much of a difference toward alleviating the $13 million deficit,” Bernard said Wednesday.
“I’m trying to keep the employment we have in the city. By voting for it, I was supporting Mayor Randy Roach and our financial director (Bruchhaus). I’m sorry the other board members didn’t see it that way. I hope we can come to a compromise.”
Webb said he’s willing to negotiate and discuss the matter further at the next board meeting.
The economic incentive program has been extremely beneficial to Aeroframe and would continue to help bring future growth and job opportunities to the community, said Roger Porter, president and CEO of Aeroframe Services.
“We are fully committed to the growth of Aeroframe Services,” Porter said in a prepared statement to committee members. “Continued support from our local community is crucial in promoting a competitive advantage in our industry and ensuring our long-term success in Lake Charles.”