School Board votes to end Aeroframe tax credit

By By Lance Traweek / American Press

The Calcasieu Parish School Board on Tuesday voted 9-5 to not renew a $600,000-per-year sales tax credit for Aeroframe Services.

Board members who voted against renewal said the plan wasn’t in the best interest of the system, which faces a $13 million deficit next fiscal year. Proponents argued that the tax credit, which would have been phased out over a five-year period, is crucial to keeping Aeroframe, and its over 400 jobs, in Lake Charles.

“The last several years we have been hit with hard times. When times were better for us, we were there,” said District 12 board member Joe Andrepont, who opposed renewing the tax credit. “When times are hard, there is no one coming to this board

to help us financially.”

Several community officials urged the board to renew the tax credit — including Mayor Randy Roach; R.B.

Smith, the Southwest Louisiana Economic Development Alliance’s vice president for workforce development; Chennault International Airport Authority

board member Charles Dalgleish; and Roger Porter, president and CEO of Aeroframe Services.

They questioned Aeroframe’s future without the tax incentive.

Without it, Dalgleish said Aeroframe may leave the area and won't pay the taxes anyway.

“We have to do what we have to do to keep this business here,” Dalgleish said. “The margins of profit are razor thin.”

Aeroframe has more than 400 employees with a $20 million payroll.

The board’s staff recommended the tax exemption be renewed.

Karl Bruchhaus, the school system’s chief financial officer, said the 410 people who work at Aeroframe are not included in the exemption.

“This exemption applies strictly to sales taxes that Aeroframe pays,” Bruchhaus said. “It doesn’t apply to all the sales taxes

their employees pay when they buy stuff.”

Bruchhaus said the school system benefits whenever Aeroframe's employees purchase

goods in the parish.

“That’s why even in our deficit situation, we recommended as a staff the renewal,” he said. “At least this was a phase-out

and that’s why we recommended it — the turnover of that money.”

“We do not want to lose 400 jobs,” Smith said.

The Lake Charles City Council recently agreed to extend Aeroframe's tax credit with the city. The credit will continue but it will be phased out over five years. Officials have said that at the end of the term, they will probably revisit the issue.

Roach told the School Board he understands the

challenges it

faces with its deficit but called the tax credit “critical and

important” for Aeroframe’s continuing existence at Chennault.

Porter said Aeroframe posted losses the last two years and that the tax credit would give the company the ability to “compete

on a global market.” Porter added that a tax exemption in the aviation MRO business is common.

District 6 board member Bill Jongbloed, one of the five who voted for the extension, said he favored the idea because of recommendations made by officials.

“All of these are very knowledgeable, credible people who know more about the situation than any of us,” he told fellow board

members. “When they all come up here and ask for a little help, I’m thinking we better listen.”

The incentive began in 2003 for EADS. Aeroframe inherited the credit from EADS, benefiting

from about $5.4 million in tax credits since December 2005. The arrangement expires at the end of May.

The tax credit would have

started at $600,000 and decreased

by $120,000 each year. If the phase-out had been approved by the school board, Aeroframe would have

received $1.8 million in tax credits for the five-year period.