1. LCA/LCIA Annual Legislative Conference May 9, 2018
Louisiana Chemical Industry
Economic Impact
LCA/LCIA Annual Legislative Conference
May 9, 2018
Dr. Loren C. Scott
Loren C. Scott & Associates, Inc.

2. Chemical Manufacturing Plastics & Rubber Manufacturing (NAICS 326)
The Industry
Chemical Manufacturing
(NAICS 325)
Plastics & Rubber Manufacturing (NAICS 326)

3. Rank In Country: 2016 (Note cluster at bottom)
Region
Value of Shipments
(billions)*
% of U.S. Total
U.S.
$959.0
100.0%
Texas
138.9
14.5%
California
96.5
10.1%
North Carolina
62.6
6.5%
Illinois
59.4
6.2%
Ohio
53.7
5.6%
Louisiana
50.4*
5.3%

5. Makeup in Louisiana: 2016 Sector Value of Shipments* Total NAICS 325
$49.0 Billion
Basic Chemicals
$26.5 Billion
Resins, Synthetic Rubber, Artificial Synthetic Fibers & Filaments
$12.8 Billion
Pesticides, Fertilizers, Ag Chemicals
5.0 Billion
Soaps, cleaning compounds, toilet preparations
$3.7 Billion
Paints, Coatings, Adhesives
$0.2 Billion
Other Chemicals
$0.5 Billion
Rubber & Plastics products manufacturing (NAICS 326)
$1.4 Billion

6. The International Connection
2017: $9.7 billion in chemical products exported
18% of Chemical Production
17% of merchandise exported from LA

8. The “rock” hits the “pond”
Impact on the State:
The “rock” hits the “pond”

9. Employment Largest Manufacturing Employer in LA in 2017-III
29,109* jobs
About 1/5th of Manufacturing employment
#2 Fabricated Metals: 17,042

10. “Direct Employment”: Grossly Understated
The “contractor” issue
ExxonMobil’s big Chemical Plant:
1979: 2,200 employees
2017:
1,003 ExxonMobil
1,200 Contractors
Of ExxonMobil’s 3 chemical plants in EBR: 1,493 employees (out of 2,975) are contractors

11. Employment Largest Manufacturing Employer in LA in 2017-III
29,109* jobs
About 1/5th of Manufacturing employment
#2 Fabricated Metals: 17,042

12. Distribution of Employment: 2017-III
Six parishes with 1,500+
1. Calcasieu – 4,928
2. Ascension ,053
3. Iberville – ,425
4. EBR – ,117
5. St. Charles – 2,341
6. Jefferson – 2,074
53 of 64 parishes record at least some employment in the industry

13. Employment by Parish: 2017-III

14. The Earnings Side

15. Average Weekly Wage in Manufacturing: 2017-III
Petroleum Manufacturing $2,112
Chemicals Manufacturing* $2,050
Plastics/Rubber $1 ,005
Average Manufacturing $1,346
Average Louisiana $ 870
52% higher than manufacturing average
136% above average wage of ALL workers in Louisiana

17. $2.9 Billion in Total Wages: 2017-III
Highest of any industrial sector in the state
Oil & Gas Extraction: $2.8 billion
Refining $1.4 billion
Very important! Does not include contractor wages

18. $2.9 Billion in Wages: 2017-III

19. Distribution of Earnings: 2017-III
Top 6
Calcasieu - $541.1 mm
Ascension - $491.3 mm
Iberville - $375.8 mm
EBR - $348.2 mm
S. Charles- $297.2 mm
Jefferson- $191.1 mm

20. Adding in the multiplier effect
The TOTAL Impact
Adding in the multiplier effect

21. Total Impacts - 2017 Business Sales: $79.7 billion
Household Earnings: $15.7 billion
12.4% of all earnings in LA
$1 of every $9 earned in Louisiana
267,601 jobs
1 of every 7 jobs in the state
Means average wage of all jobs = $58,669
Average annual wage in LA: $45,240
Job multiplier of 9.2

22. Tax Impacts State Taxes: 2012
Corp. Franchise & Income: $3,400,060
Direct Sales Taxes: ?
Indirect Taxes: $1,098,706,000
Total: $1,102,106,000
Total collected from gaming taxes & tobacco taxes in FY17 = $1,102,100,000

23. Tax Impacts: 2017 Local Government Taxes
Property Taxes: $174,676,308*
Direct Sales Taxes: ?
Indirect Taxes: ,790,000
Total $959,466,308
Enough to cover the salaries of 19,266 of Louisiana’s 46,935 public school teachers (4 out of every 10)
* survey not census

24. ITEP: 2017 In Force: $89.0 bill To Chemicals: $62.7 bill (71%)
Chemicals Expiring: : $14.6 bill
Iberville: $4.3 billion
Cameron: $1.8 billion
EBR: $1.8 billion
Ascension: $1.5 billion
Calcasieu: $1.3 billion
St. Charles: $1.1 billion

25. Do High ITEP Parishes Suffer?
Value of Exemptions:*
2017
Property Taxes per Person**
Amount
Rank
% Paid By Business
Ascension
$7,386,817,877
4th
$1,043
21st
48.4%
Calcasieu
15,201,604,553
2th
1,102
18th
69.1
Cameron
26,599,925,711
1st
4,850
86.6
E. Baton Rouge
4,282,669,094
7th
1,015
22th
44.8
Iberville
5,380,104,623
5th
1,907
8th
86.0
St. Charles
7,500,167,979
3rd
2,748
76.3
St. James
1,879,083,243
2,554
82.6
St. John
4,449,644,399
6th
1,153
15th
59.1

26. Do High ITEP Parishes Suffer?
Average Teacher Salary*
Rank Among 64 Parishes
Ascension
$52,035
14th
Calcasieu
51,958
15th
Cameron
$47,445
41st
E. Baton Rouge
51,804
16th
Iberville
54,476
6th
St. Charles
54,865
5th
St. James
57,035
4th
St. John the Baptist
47,966
36th
State Average
$49,801 NA

27. A Huge Expansion Underway
The Immediate Future:
A Huge Expansion Underway

28. Massive Chemical Expansion 60 Projects Since 2012
Capex #
Jobs
Announced Projects
$ 159,532,888,000
 60
19,055*
Total Potentials
$ 89,673,000,000
 21
5,273
Total Completed/Underway
$ 69,859,888,000
 39
13,782

29. Threats to the $89 Billion Potentials: The Problem of Texas
Texas LA
Business Climate # #40
Legal Climate # #51
Transportation # #44
Higher Ed # #42
Pre K # #45

30. Threats to the $89 Billion Potentials: The Problem of Texas
No personal or corporate income tax
No tax on manufacturing equipment
No tax on manufacturing inputs
Unified sales tax collection
Lower local sales taxes
Does have a gross receipts tax similar to our franchise tax
This is a lot to overcome

31. Threats to the $89 Billion in Potentials: JBE 2016-26
Essentially created enough uncertainty to make out ITEP = 0 in location calculations
Good news: Most were announced prior to June 2016 so are exempt from JBE

32. Threats to the $89 Billion in Potentials: “Fiscal Cliff”
New taxes on business since FY16:
FY16: $575 million
FY17: 1.33 billion
FY18: 1.35 billion

33. LCA/LCIA Annual Legislative Conference May 9, 2018
Louisiana Chemical Industry
Economic Impact
LCA/LCIA Annual Legislative Conference
May 9, 2018
Dr. Loren C. Scott
Loren C. Scott & Associates, Inc.