(The Center Square) — The Louisiana Legislature’s Commission on the Equitable Distribution of Certain Ad Valorem Taxes met on Tuesday to discuss potential changes in how tax revenue from private rail car lines is allocated across the state.
The discussion centered on whether Louisiana’s current system — which directs the majority of this tax revenue to East Baton Rouge Parish — is fair and how other states handle similar taxation.
Danny Ford, representing the Rail Association of Louisiana, emphasized that the organization remains neutral on the issue, leaving it to lawmakers to decide how the tax should be distributed. “Different states figure out how much they want to tax and how they want to allocate it, and that is up to you,” Ford told the committee.
A major point of contention is the current allocation method. Under existing law, if a private rail car company does not have a business presence or agent of record in Louisiana, its tax liability is assigned to East Baton Rouge Parish by default.
Some lawmakers argue this system unfairly benefits one parish at the expense of others where the railcars operate.
Michael Matherne of the Louisiana Tax Commission outlined alternative approaches, including distribution based on the number of railroad miles within each parish.
“Some of our sister states allocate tax revenue by calculating total railroad miles and distributing revenue proportionally,” Matherne explained. “Texas, for instance, follows this model.”
Sen. Jay Luneau, D-Avoyelles, supported considering a mileage-based allocation, asking for a breakdown of the steps needed to transition to such a system.
Matherne noted that implementing the change would involve minor software upgrades but would not be prohibitively expensive. He also highlighted the risks that rail operations pose to local communities, such as derailments or accidents, arguing that parishes where rail activity occurs should benefit from the associated tax revenue.
Rep. Steven Jackson, D-Bossier, proposed an alternative solution—creating a dedicated fund where tax revenue could be pooled and parishes could apply for funds to support infrastructure projects. However, constitutional concerns were raised about redirecting local tax revenue in this way without a statewide amendment.
Lawmakers acknowledged that shifting tax revenue away from East Baton Rouge Parish could face political hurdles.
“We all might just come out of this a little bloodied because East Baton Rouge Parish is going to put up a fight,” Jackson admitted, while supporting efforts to ensure a more equitable system.