Nucor funds to school system less than hoped

Published 12:00 am Friday, October 29, 2010

By David Vitrano

L’Observateur

LUTCHER – While the recent announcement that Nucor decided to build a multi-phase iron and steel processing plant in St. James Parish undoubtedly represents an economic boon, especially in terms of jobs, for the region, the St. James Parish school district will not benefit from the plan as much as it benefits from other in-parish industries.

This is because while most other industries own the land on which they operate and have to pay property taxes on that land, Nucor will instead lease the land from the local government thereby releasing it from any property tax obligations.

According to the cooperative endeavor agreement signed by Nucor, the State of Louisiana, the Louisiana Department of Economic Development and St. James Parish, Nucor will instead pay the $850,000 annually through 2021. Although in the agreement this sum is referred to as “School System Payments,” in reality the school system will only receive half of that money with the other half being divided between the parish and Sheriff’s Department.

Superintendent Alonzo Luce said the company had also requested the district waive a portion of the sales taxes during the construction phase of the project, but because it had never granted such a break in the past, the board refused.

“(Sales tax revenue) is basically what we run our school system on,” said Luce.

Luce said the project is expected to generate about $11.6 million in sales taxes during the first two years. Nucor had asked for that amount to be reduced to about $6 million.

Extra revenue will certainly come in handy for the district as the state recently tightened the purse strings that control educational funding even further.

“Our legislators are killing public education,” said Board Vice President George Nassar.

He asked the public to “convince them to stop making the cuts being done to the school system” through letters and phone calls.

Luce, while the state has not yet touched the Minimum Foundation Program funding, many of the grants that funded specific programs and initiatives in the parish have been cut.

This comes at a time when the state is also forcing local school districts to contribute more to the retirement program. This year alone, the St. James school district saw an increase of about $1.5 million in retirement payouts. According to Luce, just keeping the district at its current staffing level will cost an additional $1 million during the next fiscal year.

Nassar said one of the factors the district has long prided itself on — low teacher-to-student ratios — is slowly slipping away because of budget cuts.

Said Nassar, “In the long run, it’s all about our kids.”