Election Guide: Downtown Development Authority tax renewal

Downtown voters get the April 30 election all to themselves — during Festival International. Early voting is already underway for the lone proposition ballot: Should Lafayette renew the property tax supporting the Downtown Development Authority? 

Here are answers to the core questions voters need to understand before heading into the ballot box.

What is DDA?

A public agency created by the state Legislature in 1992 with the mission to further “the physical, economic, and cultural development of the downtown district — preserving and enhancing its important place as the heart of Lafayette and Acadiana.” 

What is the Downtown district?

The district boundaries make up all of what most will think of Downtown, but the map reaches just across Johnston Street, Congress Street, University Avenue and the railroad tracks. Here’s the official map: 

What does DDA do?

DDA works like an economic development agency. Think of it like a tiny Lafayette Economic Development Authority. Its staff works to recruit business and private development and advocates for public infrastructure projects Downtown. Its staff oversees the implementation of the Downtown Action Plan, which lays out a roadmap for the district’s development; connects developers with local, state and federal incentives; and offers grants like the Retail Tenant Improvement Program, which helps retail businesses start and expand Downtown.

DDA’s staff also supports the operations of Downtown Lafayette Unlimited, a private nonprofit that produces events like Downtown Alive!.

How is DDA funded?

Primarily from a dedicated property tax of 15 mills that’s assessed on properties located in DDA’s taxing district. This millage collects around $450,000 per year.

Downtown Development Authority Millage

Mill rate:
15
-$75,000 from property value. Applies to your primary residence.

Your Annual Cost:
 
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Who pays the tax?

Only for-profit property owners who own property in DDA’s taxing district. Schools, churches, nonprofits and governmental entities do not pay property taxes. A large chunk of DDA’s footprint is tax-exempt properties. 

Who gets to vote?

Only registered voters who live in DDA’s district boundaries. Downtown property owners aren’t allowed to vote unless they live in the district. 

Is this a tax increase?

No. DDA’s current tax rate is 15 mills. The renewal resets the maximum tax rate at 15 mills (more on that in a second). While the tax rate is higher than the previous tax rate (10.91 mills in 2007), this vote won’t increase what Downtown property owners pay.  

But the ballot proposition says it’s an increase. How is this not an increase?

Property tax rates fluctuate. They can go up or down when total assessed property values change. A mechanism in state law moves property tax rates up and down to keep revenue stable for taxing authorities like DDA. 

DDA has increased its tax rate (lawfully) multiple times over the last few years to stabilize its annual budget as total assessed property values Downtown have declined. Conservative anti-tax group Citizens for a New Louisiana has characterized this in campaign mailers as a “legal loophole” used to increase taxes without public approval. But this is how all property tax assessments work in Louisiana. The City and Parish councils do this routinely.

The ballot language does use the word increase, which is where the confusion comes in. Here’s the relevant part of the ballot language: 

Shall the Commercial Core Sub-District of the Lafayette Centre Development District (the “District”) continue to levy and collect a special tax of fifteen (15) mills on all the property… which represents a four and nine hundredths mill (4.09) increase (due to reappraisal) over the 10.91 mills authorized through the year 2022 pursuant to an election held July 21, 2007?

But just because the word “increase” is in this language doesn’t mean anyone’s taxes will increase as a result of this vote. 

DDA’s millage could increase or decrease in the future. For example, if total assessed property values increase, a taxing authority can keep its millage rate at the same level and therefore increase the revenue collected. It’s called “rolling forward.” Or, if those values decrease, the taxing authority could keep its millage rate at the same level and decrease the revenue it collects.

But for now, to reiterate: DDA’s current tax rate is 15 mills. If the renewal passes, the tax rate will still be 15 mills.

Why have Downtown’s total assessed property values declined?

Changes in the banking industry, mostly, according to the Lafayette Parish tax assessor. Banks have a lot of assets, namely deposits, and they are taxed like property. Mergers and shuttered branches have taken those deposits (and other bank assets) off the tax roll. 

For example, when IberiaBank was bought by First Horizon, the new owner reduced the deposits held at the Downtown branch, which lowered the amount of moveable property in the Downtown district. 

Besides these banks, other property values have increased, the assessor says, but not by enough to offset those losses.

What’s stopping DDA from increasing its millage beyond 15 mills?

State law blocks taxing authorities from arbitrarily increasing tax rates. DDA’s millage can only increase past what’s been approved by voters when total assessed property values decline. 

If total assessed property values do fall again in the future, DDA could increase its rate to keep revenue collections stable.

What happens if DDA’s millage fails to renew?

For this April vote, nothing. DDA’s millage will continue being collected through the end of 2022. DDA would get a second and final shot at a renewal this fall. If that fails, it would likely mean the end of DDA as we know it. The tax generates more than 90% of DDA’s revenue.