Baton Rouge: Economy

Major Industries and Commercial Activity

Baton Rouge has one of the nation's largest deep-water ports, equipped to handle both ocean-going vessels and river barges. A 45-foot channel on the lower Mississippi River has established the region as one of the nation's most attractive locations for large-scale industrial development. The region served by the port thrives on the large industrial and chemical complexes, as well as agricultural interests, along the 85 miles of the Mississippi River in the port's jurisdiction. Forest and agricultural products, steel and pipe, ores, coal, and petroleum products top the list of cargoes shipped through the port. In the Greater Baton Rouge area a natural resources basin exists, giving industries inexpensive access to the natural resources of gas, oil, water, timberland, sulphur, salt, and other raw materials. In 2004, the Port of Greater Baton Rouge handled more than 6.1 million tons, an increase of 11.5 percent over the previous year.

The travel industry continues to figure prominently in the Baton Rouge economy. Future growth in the Baton Rouge area appears to be in this industry, as well as in finance and insurance, and health care.

Items and goods produced: petrochemicals, rubber, plastic, wood, paper products, food, concrete, scientific instruments

Incentive Programs—New and Existing Companies

Local programs

Companies wishing to expand or establish roots in Baton Rouge are eligible for a variety of investment incentives. The industrial tax exemption provides that new industrial buildings, machinery, and equipment are exempt from property taxes for five years with provision for a five-year renewal. A five-year property tax abatement on improvements to a structure is available when renovation has not yet begun, with a five-year option for renewal. Existing structures in downtown, historic or economic development districts are eligible, including Spanish Town and Beauregard Town. Urban Enterprise Zones offer a one-time tax credit of $2,500 for newly created jobs, for up to a five-year period. For each new net job created, employers attain job tax credits ranging from $100 up to $225. Foreign trade zones allow foreign goods to enter the zone duty-free and quota-free. The Freeport Law permits most manufacturers to avoid paying taxes on raw materials brought to the state until they enter the manufacturing process. Financing assistance is offered through industrial revenue bonds, general obligation bonds, agriculture revenue bonds, plant loans, and other programs.

State programs

Louisiana has pledged itself to broaden its business base through liberal development incentives and loan programs. The Louisiana Quality Jobs Act offers a tax rebate of up to 5 percent of payroll paid each year for 10 years to new or expanding labor-intensive companies that create $1 million in gross annual payroll, conduct 75 percent of their business out of the state, and provide at least 50 percent of premium coverage for basic health insurance. The Louisiana Capital Investment Tax Credit incentive program is aimed at capital-intensive industries and will give a franchise tax credit of 5 percent per year over 20 years on invested capital in new or expanded facilities.

Job training programs

The Louisiana State Board of Elementary and Secondary Education offers the Quick Start Program whereby participating businesses can obtain workers who are trained with skills to match the needs of the company. Training is offered either at a neutral site or at the company facility. The Job Training Partnership Act assists industries in choosing applicants, provides customized training for specific occupational skills and reimburses industry up to 50 percent for wages paid. Other opportunities are available through the Louisiana Department of Labor.

Development Projects

In what community leaders called the first significant expression of confidence by a private investor in Baton Rouge's long-term plan for downtown renewal, Argosy Gaming Company constructed a 300-room convention center hotel, the first hotel to be built downtown in 50 years. The Argosy Casino Baton Rouge is a three-deck riverboat casino featuring over 29,000 square feet of gaming area. Argosy has invested an $80 million in downtown's Catfish Town on a gambling boat, dock, garage, and 100,000 square feet of retail space.

Plan Baton Rouge, the city's downtown revitalization program, was developed by Andres Duany, a pioneer of the New Urbanism movement. Part of Plan Baton Rouge calls for a $30 million expansion and renovation of The Baton Rouge River Center, the city's entertainment, government, and convention center. Projects in the plan continued into 2005 and included improvements and developments throughout the entire city.

While several new parking garages were built in the early 2000s, the issue of parking and getting around the downtown area was still a challenge. In 2003 and in hopes of alleviating vehicle congestion, freestanding trolleys began running, moving passengers to and from a variety of downtown destinations.

Opened in early 2005, the $55 million, 125,500 square foot Shaw Center for the Arts houses the Louisiana State University (LSU) Museum of Art, a 350-seat performing arts theater, rehearsal halls, LSU School of Art galleries and classrooms, and retail space. In early 2005, ground broke on the massive, 36-story RiverPlace project, a $45 million development that will consist of 99 residential units, retail space, a spa, meeting space, and a fitness center. The first high-rise condominium development in Baton Rouge's downtown, the center is expected to be completed in 2007.

Other projects in the planning or construction phase in early 2005 include a $30 million expansion of the Riverside Centroplex; a $34 million expansion of the City Plaza; a new $2.7 million State Visitors Center; a new $30 million Education-Bienville Building; a bike and pedestrian path costing $2 million; a new Capitol House Hilton at $50 million; and many others.

Economic Development Information: Greater Baton Rouge Chamber of Commerce, 564 Laurel Street, PO Box 3217, Baton Rouge, LA 70801-1808; telephone (225)381-7125

Commercial Shipping

The Port of South Louisiana (LaPlace) led the nation in cargo tonnage, and the ports of New Orleans, Baton Rouge and Plaquemines were in the Top 10. The Port of Greater Baton Rouge, the sixth largest deep water port in the United States, links the city to markets throughout the world. The port has a bulk coke handling facility handling more than 1 million tons of green and calcine coke annually. The port also houses one of the largest molasses terminals in the world, with a liquid storage capacity of 16.3 million gallons. The terminal also handles chemicals such as acids and glycol-based products. Forest products are Baton Rouge's leading commodity, including such products as woodpulp, linerboard, flitches, logs, plywood, lumber, milk carton stock, newsprint, and other paper products.

Two major railroads furnish daily service, connecting Baton Rouge with key points throughout the country. A system of interstate highways permits access to and from Baton Rouge for more than 40 common motor carriers that ship a broad range of materials through the area. More than 50 barge and steamship companies offer services to the interior of the United States.

Labor Force and Employment Outlook

The efforts of the Baton Rouge Joint Labor-Management Committee, in conjunction with the passage of the right-to-work law, have created a positive labor-management situation in Baton Rouge. The employment base is diverse, with most jobs occurring in the retail, government, and services sectors.

The following is a summary of data regarding the Baton Rouge metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 305,700

Number of workers employed in . . .

construction and mining: 33,000

manufacturing: 21,400

trade, transportation and utilities: 58,400

information: 5,300

financial activities: 16,700

professional and business services: 35,900

educational and health services: 33,800

leisure and hospitality: 28,400

other services: 11,500

government: 61,200

Average hourly earnings of production workers employed in manufacturing: $17.57

Unemployment rate: 5.4% (December 2004)

Baton Rouge: Economy

Largest area employers Number of employees
Louisiana Department of State Civil Service 24,985
The Shaw Group Inc. 12,500
East Baton Rouge Paris 11,312
Turner Industries Holding Co. LLC 11,092
Louisiana State University 6,809
ExxonMobil 5,261
City of Baton Rouge/Parish of East Baton Rouge 4,389
Jacobs 4,000
Our Lady of the Lake Regional Medical Center 3,500

Cost of Living

With an exceptionally low property tax, plus a generous state homestead exemption, Baton Rouge is a desirable place to own a home.

The following is a summary of data regarding several key cost of living factors for the Baton Rouge area.

2004 (3rd quarter) ACCRA Average House Price: not reported

2004 (3rd quarter) ACCRA Cost of Living Index: not reported

State income tax rate: Ranges from 2.0% to 6.0%

State sales tax rate: 4.0% (food sales exempt)

Local income tax rate: None

Local sales tax rate: 5.0%

Property tax rate: average 91.3 mills per $1,000 of assessed valuation (2004) (residential property is assessed at 10% of fair market value with a $7,500 homestead exemption)

Economic Information: The Chamber of Greater Baton Rouge, 564 Laurel Street, PO Box 3217, Baton Rouge, LA 70801-1808; telephone (225)381-7125