The mayor-president believes Lafayette is in its best financial position ever. His optimism overlooks flatlining property tax revenue.
Walmart’s decision shines a light on serious issues with no easy answers.
Recent headlines indicate 2018 might be the year our economy started recovering. But there’s ample evidence that any optimism should be guarded given the situation our economy’s in.
The gist: Lafayette lags far behind other American cities in job creation and retention and economic growth. The city ranked 196 out of 200 cities measured in the Best-Performing Cities index created by the Milken Institute, a California-based think tank.
Given that he fostered an industry that generates billions of dollars in GDP, it’d be great to ask him what he would do to get us out of the $10 billion hole our economy’s in.
While one economist may be projecting the end of Lafayette’s recession, more context is needed to understand the situation our economy is in
The day started with the news that LAGCOE was leaving for New Orleans and ended with a pitch competition that’s a symbol for a future where Lafayette is a hub for healthtech startups.
The gist: Lafayette Parish Tax Assessor Conrad Comeaux has just finished up the latest tax roll, confirming that Lafayette lost hundreds of millions of dollars in movable property since 2015.
$559 million: That’s the total decrease in movable property in Lafayette from 2015 to 2017.
What does “movable property” mean? Movable property refers to the property owned by businesses other than real estate, things like equipment and inventory.
How big of a deal is this? Compared to the overall value of real and movable property in Lafayette Parish of more than $20 billion, we’re only talking about a loss of a couple of percentage points. But when you look at movable property on its own, the decrease is more like 10 percent. What this means is 10 percent less tax revenue generated by movable property, which adds up to millions of dollars of lost income for Lafayette Consolidated Government, the Lafayette Parish School System, the Lafayette Parish Courthouse, and every other organization that relies on property tax millages to fund their operations.
$10 million: That’s the amount the total assessable value of the property tax roll increased from 2016-2017. The reason for this is that real estate values have continued to hold steady or go up, which has offset the losses in movable property. But even here the numbers don’t look great as the total value of real estate in the parish rose more than $400 million to about $18 billion in total. That means the total residential and commercial real estate values in Lafayette Parish only increased a bit more than 2 percent. On average nationally, commercial property values increased more than 7 percent and residential property values more than 5 percent. Put another way, if real estate values in Lafayette Parish had increased 5 percent instead of 2 percent and if movable property values had just held even, the market value of our property tax roll would be about a billion dollars higher and generating more than $10 million in additional tax revenue for the aforementioned entities.
But this is all just about oil and gas, right? While these trends may have started in oil and gas, they’ve spread throughout Lafayette’s economy as retailers are stocking less inventory and banks are seeing deposits go down. And while the value of real estate has been keeping our heads above water, we’re likely to start seeing that area get hit as well, as vacancy rates are higher in apartment buildings and occupancy rates are lower in hotels, both of which can negatively impact the value of those buildings and therefore put downward pressure on property tax revenues for LCG.