Ascension’s midyear sales tax collections soar amid growth

Beneath a forest of cranes set against the backdrop of an already sprawling chemical plant, more than 2,000 construction workers are building a $2.1 billion expansion of CF Industries’ nitrogen complex on the west bank of Ascension Parish.

Not expected to be finished until mid-2016, the 100-acre addition to the nation’s largest nitrogen facility has already had more than 17,000 pilings driven into the ground to undergird the foundations of three major production units planned in the former cane field off La. 70 near Donaldsonville.

A temporary concrete plant also has been set up on-site as more than 60,000 cubic yards of concrete have been poured and the first 1,800 tons of steel have been erected, CF officials said.

The massive project is the largest among several under construction in Ascension Parish that have fueled robust sales tax growth over the past two years, parish officials say.

As a result, Ascension’s various taxing jurisdictions hauled in record combined sales tax revenues in 2013 estimated at $147.2 million.

The total dwarfs the 2012 take of $118.5 million — a 24 percent increase from 2012 to 2013 — and even lower totals in the prior four years when the economy was reeling from the 2008-09 slump.

Officials with Ascension Parish government and with the parish’s sales tax authority said that in 2014, the collections likely will match or possibly exceed the record year in 2013.

“We anticipate collecting more sales taxes this year than last, which was our banner year — at least as much if not more,” said Gwen LeBlanc, parish government chief financial officer.

Sales tax collections through July for all parish and municipal governments that collect sales taxes in Ascension Parish have pulled in $90.2 million, up 3.2 percent from the 2013 mid-year total of $87.4 million, figures from the parish sales tax authority show.

That increase means $2.8 million more in sales tax collections spread across all local governments.

“This year is doing well,” said Mark West, administrator of the parish Sales and Use Tax Authority. The authority helps oversee the collection of sales taxes in Ascension.

Low natural gas prices pushed down by the controversial hydraulic fracturing drilling method, which has opened up vast reservoirs of gas in large shale plays, have driven a string of industrial announcements the past few years along the Mississippi River corridor.

According to a parish School Board estimate, $5.8 billion in projects have been announced in Ascension since Nov. 30, 2012. The spillover benefits to the economy are broadly benefiting the region.

Just down La. 70 from the CF construction site at Popingo’s in St. James Parish, workers, some in fluorescent yellow vests, filed into the gas station/restaurant during a recent lunch hour.

They were working at Mosaic’s Faustina plant in St. James Parish. That plant is undergoing a turnaround, workers said. Last fall, Mosaic was able to avoid building a planned $700 million ammonia plant by reaching a supply agreement with the expanding CF Industries.

John Milton, 47, of Amite, who is a contract crane operator working at Mosaic, said the influx of workers is a good thing. Contractors, he said, are still trying to recruit more crane operators at CF Industries for several years of work.

Quickly eating a lunch of fried catfish and shrimp rice in Popingo’s dining area, Milton said he worked on the CF job briefly last year to help assemble some of the cranes now all over the site.

He said the fact that CF and various other expansions have received state and parish incentives to draw them to Louisiana, some of which are essentially his tax dollars, is not really a worry for him.

“So I’m basically paying myself,” Milton said.

“It keeps you busy. It keeps you in a job. It keeps your bills paid,” he added.

The CF project has not hit peak construction activity. The total number of workers is expected to reach or exceed 2,500 later this year. But even with this largesse, parish officials are watching the horizon for the inevitable drop as some of the major projects have been finished or are nearing completion.

J. Michael Eades, president and CEO of Ascension Economic Development Corp., said he thinks the parish is about halfway through the announced projects. Westlake has finished a $425 million expansion while BASF is winding down on three expansions of its own.

Others are in the design phase, such as the $300 million Avalon Rare Metals facility. Methanex, which is reassembling a former Chilean methanol plant in Geismar, already is planning a second that has not been started and is eyeing a possible third. The first two phases are worth $1.1 billion.

Eades said he expects at least one more year of strong sales tax collections, though the parish could then see a lag before another wave of collections arrives. The parish’s 975-acre state-certified megasite near Donaldsonville, which is in a bend along the river at Pointe Sunshine, is drawing “active interest,” Eades said of potential industrial suitors.

“And it’s a pretty substantial deal,” he said.

He declined to provide any details.

However, in late July, the Houston Chronicle and the Galveston, Texas, Daily News each reported that Chinese companies Connell Group of China and Sino Life Insurance Co. are eying sites in Texas City, Texas, and near Donaldsonville for a $4.5 billion methanol plant.

The site in Texas has 900 acres with deep-water access, as the Donaldsonville megasite does.

The papers quoted C.B. “Bix” Rathburn, CEO of the Galveston County Economic Alliance, as the source. He declined by email Friday to confirm the reports.

Follow David J. Mitchell on Twitter, @NewsieDave.