After raising objections just days ago, legislators agreed Thursday to a $257 million incentive package for South African energy giant Sasol Limited.
The state Joint Legislative Committee on the Budget also gave clearance to a possible $60.9 million in incentives for a liquefied natural gas tanks project for eastern New Orleans.
The tanks project got caught up in concerns last week over how much the state will end up paying toward a plant Sasol plans to build in Calcasieu Parish.
Legislators directed state Economic Development Secretary Stephen Moret to bring them more details. They also asked an economist with the Legislative Fiscal Office to look at the incentive package.
Moret told the committee Thursday that the Sasol project would generate more new state and local revenue than any other project in Gov. Bobby Jindal’s two terms. “This project, members, is the biggest single economic development project in the history of our state,” he said.
Greg Albrecht, chief economist for the Legislative Fiscal Office, predicted the state will pay more in incentives than the project will produce in new revenue. “You do these projects because they’re important to you. That’s a political decision,” he said.
Sasol announced in December that it plans to spend between $16 billion and $21 billion on an ethane cracker and a facility that will convert natural gas to diesel in southwest Louisiana.
The Jindal administration wants to give the company $115 million in grants, $69.7 million in rebates and other incentives over the span of 10 years.
The $115 million is for land acquisition and infrastructure costs.
State Sen. Jack Donahue, who pushed last week to stall a decision on the incentive package, said Thursday that the state’s revenue collections appear to be strengthening. He said the Sasol project likely will add even more dollars to the state’s coffers.
“Can you say for certain the state would be a loser?” Senate President John Alario, R-Westwego, asked Albrecht.
Albrecht said the state is unlikely to collect more revenue than it pays out.
“You’re just looking at state expenditures and state income,” state Sen. Mike Walsworth said.
Walsworth, R-West Monroe, said local governments will benefit from increases in local sales tax collections.
House Speaker Chuck Kleckley, R-Lake Charles, said five economists would give five different opinions on the project’s impact.
“I know what I see in southwest Louisiana,” he said. “I know the millions of dollars this company is spending today.”
Donahue, R-Mandeville, said legislators might in the future put a cap on one of the incentives that Sasol will receive.
“I am satisfied,” he said, before asking if there was any objection to the incentive package. No objection was raised.
The committee then turned to the eastern New Orleans project and quickly approved it.
Lockheed Martin Corp. plans a liquefied natural gas tanks project at the Michoud Assembly Facility.
“This is a great project,” said state Rep. Jared Brossett, D-New Orleans.
Brossett asked Moret to do one thing on the project. He wants Moret to engage with New Orleans area colleges about putting graduates to work at the facility.