HB 420 will not only take away revenue crucial to the Cajundome, but by putting that money into the hands of a private, nonprofit to use in the redevelopment of Holy Rosary Institute, the proposed legislation may represent what the Louisiana Constitution defines as a prohibited use of public funds.
HB 420 will not only take away revenue crucial to the Cajundome, but by putting that money into the hands of a private, nonprofit to use in the redevelopment of Holy Rosary Institute, the proposed legislation may represent what the Louisiana Constitution defines as a prohibited use of public funds.
Following the bill's unanimous approval Monday by the House Appropriations Committee, The IND spoke Wednesday morning with Holiday Inn Lafayette General Manager Ed Buchert, chairman of the Louisiana Hotel-Motel and Lodging Association and a member of the Lafayette Convention and Visitors Commission. A resolution opposing HB 420 was passed by LHA and a similar action may be taken by LCVC, says Buchert.
That opposition, says Buchert, centers on where HB 420 proposes to redirect the state's portion of Lafayette's hotel/motel tax, an allocation approved by the state Legislature more than a decade ago. According to the bill, $200,000 would be removed from funds currently allocated to the Cajundome for "planning, development or capital improvements" - money that has gone to the Cajundome and its convention center since 1995 - and would instead be given to Holy Rosary Redevelopment, a private, nonprofit organization.
"This money comes from [the Lafayette Parish] hotel/motel tax, and is supposed to be reinvested back into those venues; venues that will drive tourism and increase attraction to our city," says Buchert. "The Cajundome and convention center are specifically there for the benefit of our community, and for our hotels, so we can generate tourism dollars within our city. Removing this $200,000 from the Cajundome's allocation to fund Holy Rosary is an inappropriate use of this money."
What's more, argues Buchert, the Cajundome already is faced with revenue issues, which makes it difficult to maintain competitive rates, resulting in the venue being more expensive in comparison to similar facilities in other cities. Losing the annual $200,000 allocation could result in increased rates, he says, thus decreasing the attractiveness not only of the Cajundome, but Lafayette tourism as a whole.
"This will just take a bad situation and make it worse," says Buchert. "It makes no sense at all. Instead of going through general appropriations and following the law, [state Reps. Vincent Pierre, D-Lafayette, and Terry Landry, D-Landry] are trying to pass a local bill that takes away public money and puts it into the hands of a private organization."
Even more questionable is the bill's lack of details, namely how the money will be spent, and who will be accountable in the event it is misspent.
Also voicing opposition to HB 420 is former longtime state Rep. Rickey Hardy, a Lafayette Democrat who was narrowly defeated by Pierre in the November 2011 election.
The most problematic aspect of HB 420, argues Hardy, is that it seeks to give public monies to a private entity by taking it away from a public entity.
"This is a violation of the Louisiana Constitution," says Hardy, pointing to Article 7, Sec. 14. "You can't take public money and give it to a private organization. There's no way to audit a private organization to even see how the money is being used. It's a prohibited use. It's a violation of the state constitution, and it's a ripoff to our community. As a taxpayer, I won't stand for it."
Below is that section of the state constitution, in its entirety and with emphasis added. It reads:
Donation, Loan, or Pledge of Public Credit
Section 14.(A) Prohibited Uses. Except as otherwise provided by this constitution, the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private. Except as otherwise provided in this Section, neither the state nor a political subdivision shall subscribe to or purchase the stock of a corporation or association or for any private enterprise.
(B) Authorized Uses. Nothing in this Section shall prevent (1) the use of public funds for programs of social welfare for the aid and support of the needy; (2) contributions of public funds to pension and insurance programs for the benefit of public employees; (3) the pledge of public funds, credit, property, or things of value for public purposes with respect to the issuance of bonds or other evidences of indebtedness to meet public obligations as provided by law; (4) the return of property, including mineral rights, to a former owner from whom the property had previously been expropriated, or purchased under threat of expropriation, when the legislature by law declares that the public and necessary purpose which originally supported the expropriation has ceased to exist and orders the return of the property to the former owner under such terms and conditions as specified by the legislature; (5) acquisition of stock by any institution of higher education in exchange for any intellectual property; (6) the donation of abandoned or blighted housing property by the governing authority of a municipality or a parish to a nonprofit organization which is recognized by the Internal Revenue Service as a 501(c)(3) or 501(c)(4) nonprofit organization and which agrees to renovate and maintain such property until conveyance of the property by such organization; (7) the deduction of any tax, interest, penalty, or other charges forming the basis of tax liens on blighted property so that they may be subordinated and waived in favor of any purchaser who is not a member of the immediate family of the blighted property owner or which is not any entity in which the owner has a substantial economic interest, but only in connection with a property renovation plan approved by an administrative hearing officer appointed by the parish or municipal government where the property is located; (8) the deduction of past due taxes, interest, and penalties in favor of an owner of a blighted property, but only when the owner sells the property at less than the appraised value to facilitate the blighted property renovation plan approved by the parish or municipal government and only after the renovation is completed such deduction being canceled, null and void, and to no effect in the event ownership of the property in the future reverts back to the owner or any member of his immediate family; (9) the donation by the state of asphalt which has been removed from state roads and highways to the governing authority of the parish or municipality where the asphalt was removed, or if not needed by such governing authority, then to any other parish or municipal governing authority, but only pursuant to a cooperative endeavor agreement between the state and the governing authority receiving the donated property; (10) the investment in stocks of a portion of the Rockefeller Wildlife Refuge Trust and Protection Fund, created under the provisions of R.S. 56:797, and the Russell Sage or Marsh Island Refuge Fund, created under the provisions of R.S. 56:798, such portion not to exceed thirty-five percent of each fund; (11) the investment in stocks of a portion of the state-funded permanently endowed funds of a public or private college or university, not to exceed thirty-five percent of the public funds endowed; or (12) the investment in equities of a portion of the Medicaid Trust Fund for the Elderly created under the provisions of R.S. 46:2691 et seq., such portion not to exceed thirty-five percent of the fund.
(C) Cooperative Endeavors. For a public purpose, the state and its political subdivisions or political corporations may engage in cooperative endeavors with each other, with the United States or its agencies, or with any public or private association, corporation, or individual.
(D) Prior Obligations. Funds, credit, property, or things of value of the state or of a political subdivision heretofore loaned, pledged, dedicated, or granted by prior state law or authorized to be loaned, pledged, dedicated, or granted by the prior laws and constitution of this state shall so remain for the full term as provided by the prior laws and constitution and for the full term as provided by any contract, unless the authorization is revoked by law enacted by two-thirds of the elected members of each house of the legislature prior to the vesting of any contractual rights pursuant to this Section.
(E) Surplus Property. Nothing in this Section shall prevent the donation or exchange of movable surplus property between or among political subdivisions whose functions include public safety.
Click here for our most recent coverage on the issue, which gives an opposing viewpoint from Mike Stagg, vice president of Holy Rosary Redevelopment.