In many ways, Mayor-President Monique Boulet’s first budget is kind of boring. And I mean that in a good way.
Instead of proposing half-baked, radical changes, she’s proposing what appear to largely be reasonable, fiscally prudent changes. Some of which were long overdue and will force a reckoning on some of Lafayette Consolidated Government’s finances.
But she’s also chosen to ignore some of the elephants in LCG’s budget, like how consolidated costs are shared between the city and parish, or how the parish is going to handle the liabilities left over from the prior administration’s reckless projects.
Lafayette’s lived through a financial fairy land the past few years. Boulet’s budget is sobering in that respect. It pulls back some, but not all, of the curtains on the inconvenient truths about LCG’s fiscal reality.
LCG isn’t paying people enough
The big headline Boulet started pushing before even releasing her proposed budget is that LCG’s low pay is preventing it from being fully staffed. That’s led to situations like LCG not having enough bus drivers or LUS not having enough people to fix water leaks.
Boulet has proposed giving raises that will primarily increase the pay of those who are currently the lowest paid LCG employees. Altogether these raises will increase personnel costs by more than $8 million per year across all of LCG, despite there actually being six fewer jobs in the budget.
For years, low pay has caused LCG to struggle to attract and retain employees, another can Lafayette’s leaders have kicked down the road.
Now, the staffing shortage has gotten bad enough that Boulet clearly felt like she had no choice but to rip this potentially unpopular Band-Aid off.
LCG is not in a great position to cover the cost of these raises, despite record-breaking revenue growth over the last few years.
By the end of the next fiscal year, LCG’s city and parish tax revenue is projected to have increased more than $42 million per year since 2020. And yet neither side of LCG’s finances has enough money to operate Boulet’s $750 million budget without dipping into reserves.
Boulet’s proposed budget has the city operating at a $5 million deficit in its general fund next year. And that’s despite counting on $3 million in ILOT payments from LUS Fiber that the city-owned telecom might not be able to afford. Fiber is poised to miss its revenue targets by more than $5 million this year.
The parish general fund’s deficit is budgeted to be less than a quarter million next year. But that’s largely because Boulet chose to punt on re-examining the fairness and legality of how the costs of consolidated government are allocated between the city and the parish.
Any efforts in that direction will undoubtedly increase the parish’s liabilities and therefore grow its deficit. Plus, without the unexpected windfall from the federal ARPA funds, the parish would still be on the brink of financial calamity.
This shouldn’t be surprising though. While $42 million in new tax revenue may sound like a lot, the rate of growth over these five years is roughly equivalent to the pace of inflation. So LCG hasn’t been getting richer; it’s just been treading water in terms of its core finances.
And nothing’s really changed from when I wrote about LCG’s billion dollar infrastructure deficit in 2019. We’re still not collecting enough tax revenue to properly maintain our roads or our drainage systems or our public buildings or our parks.
This budget doesn’t capture all the shortfalls
While no budget can capture the entirety of LCG’s fiscal reality, this budget in particular is missing some big ones.
There’s no more money for the Bayou Vermilion Flood Control project, which is projected to cost another $10 million to $15 million to finish. As a reminder, the state government is currently withholding $28 million in reimbursements until the project is functional.
In the meantime, the city is basically giving the parish a $17 million interest-free loan on city money spent on this parish project more than two years ago. This unauthorized loan is costing the city roughly $1 million per year in lost interest revenue.
And we still don’t know how much liability LCG might have for those spoil banks that were illegally removed in Vermilion Parish, another part of the Bayou Vermilion Flood Control boondoggle.
We also don’t know how much it’s going to cost to operate and maintain the superparks at Brown Park and Moore Park. I went to a recent community meeting on Brown Park and learned that it’s going to cost $1 million to $2 million every seven years just to replace the new artificial turf that’s being laid down. That’s likely more than was previously spent maintaining the entirety of the old Brown Park. When I asked how much more it was going to cost to operate this park and how those additional costs were going to affect funding to properly operate and maintain the city’s other two dozen parks, the new administration admitted it still doesn’t know.
It’s also not clear that LUS Fiber is financially strong enough to fulfill its obligations to the city of Lafayette. Normally Fiber ends each year with $6 million to $7 million in cash available for capital, effectively its profit.
Fiber is projected to start next year with just over $2 million in cash. And that’s while it’s in the middle of an expansion that will stretch Fiber’s footprint from Ville Platte to Abbeville to New Iberia, the telecom’s largest buildout since it was created.
Does Fiber actually have enough money to cover its match for all the grants it won? Can Fiber afford to respond effectively to the next storm that blows through and knocks down a bunch of poles? Is Fiber prepared to continue providing great service to the city while stretching itself so thin across the region? Those are important, unanswered questions, especially now that Fiber has obligations across all of Acadiana and faces staffing shortfalls of its own.
There’s not much to get excited about in the capital budget
The building bonanza of the last few years looks to be over. There’s very little in the capital budget to get excited about.
There are lots of worthwhile smaller projects. Repairs for the Heymann Center, for the Vermilion garage Downtown, for improvements to the Comeaux Recreation Center and the O.J. Mouton Community Pool.
But the only new larger projects are more streetscaping plus Boulet’s two new signature capital projects: $1 million for the I-49 Connector and $5 million for Johnston Street revitalization.
I question the wisdom of budgeting $1 million of city money for a $2 billion project that might not be built for 30 years. While I’m sure there are ways we could spend money on that project now, I’m dubious that doing so would have any meaningful benefit in the short- or long-term.
And honestly the whole idea of a Johnston Street revitalization doesn’t get me very excited. In a vacuum do I want Johnston Street to be revitalized? Sure. It’d be great if it weren’t so ugly and were more pedestrian and bike friendly. But I’m not sold on its potential to catalyze economic development.
I’d rather see us investing that money in young entrepreneurs in low-income areas or in facilities that support the growth of our cultural economy, or in getting our act together when it comes to maintaining our existing infrastructure.
Boring is good, but is it good enough?
I don’t walk away from this budget inspired by Boulet’s vision for how LCG can enable a better future for Lafayette. Maybe that’s asking for too much for a first budget from a mayor-president who has had to spend a lot of time cleaning up messes she inherited from her predecessor. Fiscal responsibility just isn’t as exciting as profligate spending, after all.
But now the ball moves into the City and Parish councils’ respective courts. Ultimately this is their budget, so it’s up to them to decide the best way to spend our city and parish dollars.