Walter Pierce

RE: Our New Normal Lafayette spent 20 years drunk on high oil prices and emerging industries. Is it time for the hangover?

by Walter Pierce

Mayor Joel Robideaux released his budget proposal for the 2016- 17 fiscal year beginning Nov. 1 and, as expected, it reflects what two years of slumping oil prices will do to an economy that remains reliant on a barrel trading around $100. At $620.6 million, it’s a tick less than the current fiscal year budget, but it makes peace with our new normal by hiking rates for Lafayette Utilities System’s customers 9 percent over three years, and the proposed budget is predicated on the council rolling forward a number of property taxes.

State law allows the council to roll forward property tax rates to the maximum amount already approved by voters — without further voter approval. LCG, the school board and a number of other taxing bodies within the parish served notice in newspapers last month that dozens of property taxes could — and likely will — rise to meet the shortfall in sales tax collections, which have been particularly lagging in unincorporated Lafayette Parish.

The short of it is that everyone who lives in Lafayette Parish will pay more in one way or another. Not everyone in the parish owns property, but taxes have a way of spreading themselves out — through higher rents, higher prices for goods and services, etc.

In order for Robideaux’s budget to work, these tax roll-forwards must be approved by the council. If they’re not, services will have to be cut and, possibly, LCG employees laid off.

That’s not so say Robideaux’s budget is all cuts and tax hikes. The mayor wants to pump nearly $5 million into sprucing up University Avenue from Interstate 10 to Four Corners, the primary gateway into Lafayette’s urban core that includes our showcase university and Downtown. It’s an admirable initiative but arguably not an exigent one under the present circumstances.

Robideaux writes in his budget statement submitted to the council on July 26: “While I am confident Lafayette will return to the thriving economy we enjoyed in recent years, it will take time. ...With continued projections of low oil and gas prices, our full economic recovery will be delayed.”

Overall, Robideaux’s budget is a placeholder designed to make do with diminishing resources while riding out the slump in oil prices, and it’s a responsible budget in that regard. But a reckoning awaits.

We’re just a few months out from a citizen committee that peered under the LCG hood for a year to study its fiscal needs, releasing its conclusion that myriad taxes must rise in the parish to meet our present and future needs.

That report underscored the conclusions of a group of LCG-hired consultants who a little over a year ago weighed Lafayette’s tax revenue against its infrastructure maintenance liabilities and reached a stark conclusion: A typical household in Lafayette would need to pay an additional $3,300 in property taxes just to maintain the roads we currently have. For all the infrastructure — drainage, sewer, water, etc. — that figure rises to about $4,000. And that’s just infrastructure, not the quality-of-life expenses like parks, recreation centers, arts and culture that make Lafayette a good place to live and raise children.

We won’t see tax hikes like these any time soon, and if we do they’ll be spread out over years. But it’s a reminder that since the advent of consolidated government 20 years ago, Lafayette has coasted on a skid greased by decent oil prices, robust sales tax collections and emerging industries like health care and tech.

Now that we’ve drained the can, at some point we’ll have to ask ourselves: Do we refill it or kick it down the road?