A primary goal of the Protect the City Committee is to identify just how much city tax revenue has been spent propping up parish government’s failing finances since consolidation. That’s another way of asking: What has consolidation cost city taxpayers?
One way of looking at that is adding up how much money the city has paid for what ought to be parish responsibilities. Put another way: calculating how much money that would be in city government’s bank account if parish government was adequately funded and could afford to pay all of its bills.
(In case you don’t already know this, while Lafayette’s city and parish governments are consolidated operationally, financially they’re not.)
I’m somewhat astonished at just how big this problem has become. Without even digging all that deeply, I’ve found more than $100 million worth of city government dollars used to pay what are arguably parish responsibilities just since 2006, which is the last year budgets are available on LCG’s website. That’s $100 million spent subsidizing parish operations and not fixing city roads, sidewalks and parks.
This is the original sin of consolidation itself. There is no way for the city of Lafayette’s interests to be fairly represented in a consolidated form of government. And now I can show you more than 100 million reasons why that’s the case.
$50+ million on expenses in the allocation schedule
The most blatant example of the city paying the parish’s bills came in cost allocation: the two dozen formulas used to determine who pays for what in consolidated government and how much.
Prior to 2013, the city paid 80% or more of a number of shared costs, like operating the offices of the mayor-president, the council, the chief administrative officer, the finance department and the IT department. But in 2013, former Mayor-President Joey Durel — then called City-Parish President — had an epiphany: “Since 1996, the city has been subsidizing parish work,” he wrote in his budget message that year. “What we believe to be a serious inequity in funding allocations has existed for over 16 years.”
To rectify this inequity, he proposed using population as the variable to determine how to split these shared costs. So instead of 84-16, these costs were split 54-46, which reflected the population ratio inside the city vs. outside the city. His new allocation schedule was approved by the LCG’s chief financial officer, by the cost allocation consultant and by the City-Parish Council at the time.
There was just one little problem: The parish couldn’t afford to pay its bigger bills. So the budgets from 2013 to 2016 recorded a deficit for the parish that totaled more than $20.5 million. But this deficit wasn’t debt the parish owed the city, as LCG CFO Lorrie Toups pointed out at a recent PTC meeting. It’s literally money the parish just didn’t pay, forcing the city to pay for it instead.
Mayor-President Joel Robideaux quietly reversed that policy in 2017, choosing to base most of these shared expenses on the amount of undedicated sales and property tax revenue the city collected vs. the parish, rather than population. Had Durel’s allocation approach continued to date, parish government would have been expected to contribute at least $6 million more each year. Over the last five years, that tallies another $30 million that isn’t in the city’s bank account.
Together that’s more than $50 million just since 2013 of city money that has been spent to cover the parish’s share of responsibilities. And that’s only the tip of a potential iceberg, as Durel argued that the city had been paying for more than its fair share of operating LCG since consolidation’s inception in 1996.
$50+ million on parish drainage projects
Lafayette Parish is a drainage district. That means in an ideal world all of the major drainage work in the parish should be paid for by that district. But Lafayette’s parishwide drainage millage has been woefully underfunded for years, lacking adequate funding to maintain existing drainage infrastructure let alone improve and expand it to deal with the increasing intensity of major rain events.
Over time, the scope of what drainage parish government claims responsibility for has shrunk, putting more responsibility on the city of Lafayette and its fellow municipalities. It’s bad policy because, as politicians like to say, water doesn’t care about arbitrary political boundaries. A centralized parishwide drainage department would be better able to realize economies of scale and better coordinate efforts so that drainage projects aren’t pursued that may help one part of the parish while hurting another. The current status quo is also heavily weighted in unincorporated Lafayette’s favor, as the incorporated parts of the parish generate 83% of the parishwide drainage millage’s revenue, yet now they’re also being burdened with 100% of the cost of drainage within their city limits.
While there are aspects of drainage that should be the responsibility of city governments, those should be limited to very localized issues. Major drainage work should be the responsibility of parish government.
But that’s not what’s happening. Instead, just in the last couple of weeks, Mayor-President Josh Guillory and the City Council approved $26 million in drainage projects on top of $31 million in city capital outlay funding already budgeted. Together, that’s more than $57 million in drainage work city government is paying for just in the current year’s budget, most of which arguably should be paid for by parish government. And that’s without digging into all the drainage work the city’s paid for since consolidation.
Rather than addressing these structural funding issues, the administration and the City Council are raiding the city’s piggy bank. And they’re doing so despite the parish having multiple options to pay for this work, like pushing for a new parishwide drainage tax, or using parish government’s bonding capacity, or tapping into the $47 million in federal stimulus money.
$5+ million on parish IT capital outlay and more
Every single day the business of parish government is being operated on IT infrastructure that’s 100% paid for by city government.
This is one of the more egregious examples of the city subsidizing the parish. While the parish pays for 14% of the operating costs of LCG’s IT department, it pays 0% of the IT department’s capital outlay budget. That means all of the computers, software and other technology used to operate parish government is paid for with city tax dollars.
From 2006 to 2021, LCG spent more than $37 million on IT capital outlay. If the parish had paid its 14% share of those costs, that would total more than $5 million. That’s before factoring in all of the spending from 1996 to 2006, as those budgets aren’t readily available online. And that’s assuming the parish only paying 14% is fair.
Beyond IT, the city covers the cost of millions in other capital expenses: parish roads, vehicles, tools and heavy equipment.
Because the city has two sales taxes that generate tens of millions for capital spending every year, and because the parish is underfunded, the city has been responsible for paying for most capital outlay for decades since consolidation. “Nearly all equipment purchased since [consolidation] has been purchased with city funds,” Durel said in that 2013 budget message.
The city’s capital funding has also been used to pay for parish roads. It’s been a common practice since consolidation for city road projects to be designed to include portions of road outside of city limits. So roads in unincorporated Lafayette that are supposed to be the responsibility of parish government are being rebuilt and/or widened using city tax dollars.
There’s no easy way to calculate just how much money the city has spent subsidizing parish road work since consolidation. And I don’t have the ability to assess how many vehicles and how much equipment have been purchased with city or parish money (though I know the PTC Committee is working on this one). But it’s safe to say that at least millions of city dollars have been spent paving parish roads and paying for vehicles and equipment used to operate parish government since consolidation. And it could easily be tens of millions given how expensive roadwork is and how much road projects on the periphery of the city have been prioritized since consolidation.
There’s a lot the city could do with $100+ million
Something is clearly broken here. Consolidation was supposed to make our government more efficient and save parish government from the brink. Yet, despite more than $100 million in subsidies from the city, parish government still doesn’t have enough money to cover its costs as parish buildings, roads and coulees fall further into disrepair.
It’s important to note that this isn’t an academic exercise. City government should have at least $100 million more in its bank account.
To give that number some context, the total backlog of roadwork in city limits is around $40 million. We could pay that down, restore all cuts made to parks and recreation and arts and culture last year for the next decade and the city budget would still have millions left over. Or city government could pay cash to replace the Heymann Center, or finish the buildout of Moncus Park, or build more parking garages Downtown, or retire all of LUS Fiber’s debt and free up more than $10 million per year in cash flow to expand the network further — or even lower city taxes.
Consolidation has cost the city of Lafayette’s taxpayers more than $100 million that was effectively gifted to parish government. In doing so, consolidation is costing us opportunities to make our city better.