Industrial ships prove'vital' to tax rolls

10 17, 2012 by Houma Courier

The ships moving through the channels and passes of Port Fourchon are becoming increasingly important to Lafourche Parish's tax collections.

As of 2011, watercraft — primarily the vessels that service and supply the offshore oil industry — made up a third of Lafourche Parish's property tax base. Tax figures are not available for 2012 but are expected to be about the same, said Lafourche Parish Tax Assessor Mike Martin.

Following the most recent reassessment, Lafourche Parish had just under $750 million in taxable property. Of that, just under $250 million was industrial watercraft.

The assessed value is reached using state guidelines factoring in the work a boat is used for in a year along with other measures. Lafourche watercraft fair use value — the value a willing buyer would give to a willing seller — is more than $1.5 billion, according to tax commission statistics.

For perspective: Real estate is probably the most commonly seen category of taxable property and had a taxable value of $188 million in 2011.

“Watercraft has grown to be a huge part of our parish taxes,” Martin said. “It is vital now.”

While the oil servicing companies that own these vessels pay taxes to the parish, it should be noted they receive an offsetting dollar for dollar tax credit on state income tax, Martin said.

Watercraft is unique to other taxable property for a few reasons. It is movable and includes just more than 900 vessels as compared to real estate, which includes thousands of buildings throughout the parish, according to statistics provided by Wendy Thibodeaux, Lafourche's chief deputy assessor.

To illustrate the value, Martin said losing one of the parish's massive offshore service boats, which can bring in around $400,000 annually in taxes, is the same as losing the taxable value of 200 homes valued at $250,000.

Terrebonne Parish's tax roll is more diverse with only 2 percent of taxable property classified as watercraft.

“Ours was less (than Lafourche). We had about $16 million assessed value,” said Loney Grabert, Terrebonne's tax assessor. “We don't have a deepwater port here.”

Much of Lafourche's watercraft wealth is concentrated where most residents never see them: all the way down La.1 at Port Fourchon.

On any given day, Fourchon has about 270 large-supply vessels navigating in and out of the port, said Chett Chiasson, executive director of the Greater Lafourche Port Commission.

While the southernmost Ward 10 holds most of the watercraft value, further north along the Intracoastal Canal is assessed a small percentage of the total, Martin said.

Since 2000, Martin said, the parish's dependence on watercraft has grown steadily from about 20 percent of taxable property as Port Fourchon has grown.

Martin said the reliance on watercraft tax money presents some concern given the way watercraft are assessed.

“It has the potential to be a very fragile tax base,” Martin said.

Martin said some factor halting oil services would decimate the parish's tax collections.

“If we lost the taxes from boats, there is just no way we could make all that money up,” he said.

One such scare was during the deepwater drilling moratorium following the 2010 Deepwater Horizon oil spill. Martin said figures indicate the moratorium probably slowed the growth of watercraft's influence on the tax rolls.

“That could have killed us,” Martin said.

On Jan. 1 each year, a detail of Lafourche Parish sheriff's deputies arm themselves with cameras and set out on waterways to document each vessel within the parish.

“It takes a whole day even with four guys,” said Chief Deputy Bud Dill.

The assessor also uses Fourchon's port records for the day along with satellite tracking of boats off Lafourche's shoreline.

Martin said only boats that are in the parish on Jan. 1 are taxable by the parish. If a boat operates all year in Lafourche but happens to be in another port on Jan. 1, it is taxable by whatever parish or county it is in.

Martin used the example of a local vessel that happened to be in Mobile, Ala., on New Year's Day but returned to Fourchon the next day.

“We wanted to assess them, but we didn't have a leg to stand on. Those are the rules,” Martin said.

There is also the possibility that some boat owners could move vessels offshore of other parishes on the assessment day to reap the financial benefits of being assessed at a lower rate, Martin said. Neighboring Plaquemines Parish levies lower taxes on property.

“There may be some that do that. I can't prove it,” Martin said.

Of the top 10 taxpayers in Lafourche, four are companies involved in oil production servicing and are based outside the parish.

A representative from the top Lafourche-based oil service company, Edison-Chouest, couldn't be reached Tuesday.

Within the next two years, Chiasson said, he expects to see as many as 45 more vessels using Port Fourchon on a daily basis as it continues its expansion.