The gist: Five sets of sales and hotel taxes were approved by city council members, acting as the governing boards of new special districts created to vigorous objection in the wrap-up of the last council and administration’s term. Legal and political hurdles remain, but as it stands the taxes would take effect in July.
Get caught up, quickly: Last year, the outgoing consolidated council and Mayor-President Joel Robideaux created five special taxing districts — called economic development districts. Because the district maps are drawn to avoid voters, they can levy taxes without a general election, leading opponents to cry foul. A lawsuit was filed to stop them. And the mayor-president has spoken out against them, announcing Tuesday that he’ll propose an ordinance to repeal them next month. Here are the districts and their taxes:
- Downtown Lafayette Economic Development District – 1% sales, 2% hotel occupancy
- University Gateway Economic Development District – 1% sales, 2% hotel occupancy
- Trappey Economic Development District – 2% sales, 2% hotel occupancy
- Northway Economic Development District – 1% sales, 2% hotel occupancy
- Holy Rosary Institute Economic Development District – 1% sales, 2% hotel occupancy
Tuesday’s vote to levy taxes was an anti-climax. Opposition to the districts continues by way of a lawsuit brought by conservatives — many of the same people who sued to stop the charter amendments — who say the districts flaut requirements in Lafayette’s charter — essentially, its constitution — that the public gets to vote on new taxes. Supporters counter that this is how all economic development districts are set up, as laid out in state law.
“The question is not is it legal…but is it the right thing to do,” asked Jeremiah Supple, a Downtown property developer and one of the parties suing to stop the districts, on potentially dubious legal grounds.
Disclosure: Jeremiah Supple donated to The Current in 2019. View our donors here.
Downtown’s district has been a lightning rod for the issue. It’s taken the brunt of criticism, becoming the scapegoat for the raft of taxes the Robideaux administration proposed in a bundle with days left in 2019. The Downtown Development Authority, which already levies its own property tax, champions the taxing district as a way to raise money for badly needed infrastructure improvements. Downtown advocates believe the $700,000 raised annually by a 1% sales tax and 2% hotel occupancy tax can help shore up aging sewer infrastructure, improve sidewalks and, long term, put new developments over the top.
“Downtown is craving for infrastructure development,” DDA board chairman Miles Matt said, defending the Downtown district. A particular sore point is a lack of sewer capacity, which has restricted the scale of residential projects Downtown. In December, the Lafayette Public Trust Financing Authority inked a deal to loan $1 million to LUS to build a new sewer lift pump, which will provide some relief. But DDA and its sympathizers have groused about a lack of public investment in general, saying the last major project to happen within its boundaries was the streetscape overhaul of Jefferson Street in the 1990s.
That came to a head over lost dollars for streetscape last year. Mayor-President Joel Robideaux shifted $5.8 million set aside for improvements along Main Street, money that had sat idle for years, to pay for other projects. DDA fought the transfer unsuccessfully but managed to keep $1 million for engineering and planning on the Main Street project.
Still, opponents view this as a way to fatten developers’ wallets. All of the EDD agreements — which are contracted with some private and some public partners — include wishlists of project types that are OK’d for funding by the district. Hotels, restaurants and other private enterprises are on the boilerplate lists for approved uses. Charles Landry, the Baton Rouge attorney hired to craft the districts, argued Tuesday night that the council members, acting as the individual members of each board, alone have the discretion to approve projects for funding. They, not the developers, control the purse strings. Landry also defended how the districts were set, saying dozens have been authorized by state law across Louisiana, none with a public vote. That’s just how these things are done, he argued Tuesday night in a spar with Councilman Andy Naquin.
The issue isn’t dead. And it’s likely to remain a political sticking point for ascendant conservative activists who have seized the issue since last year. The lawsuit filed by Supple and others is awaiting a response from city-parish attorneys but may fizzle; the plaintiffs appear to have rested their case on the wrong statute. Mayor-President Josh Guillory has aligned himself politically with the faction fighting the districts and made a campaign pledge to Republican donor Will Mills to oppose any tax increase. He announced late Tuesday afternoon his intent to repeal the districts with an ordinance next month. It doesn’t look like he’ll have the votes; the taxes passed 3 – 1 last night with Naquin the lone dissenter. Councilwoman Liz Hebert was absent from the meeting but has voted for the districts in prior steps. This marks the first real public rift between the mayor-president and the council on public policy.
What’s next. The districts will begin collecting tax revenues in July, at the start of the new fiscal year. Until there’s money in the bank, so to speak — and to be clear, this money is not rolled into LCG’s budget; the districts are separate entities — there’s not a whole lot for the districts to do.