The 'T' Word

by Nathan Stubbs

Tax increases in Lafayette are getting support from some unlikely sources.

At his annual State of the City-Parish Address in January, City-Parish President Joey Durel let the numbers do most of the talking. Through a slideshow presentation and CD-ROMs that he placed at each table, he showed how the parish's finances were continuously coming up short.

Post-Katrina rises in construction costs have helped contribute to about a $150 million shortage of funds for road and drainage projects. Meanwhile, health care and retirement cost increases have helped eat into pay-as-you-go capital for annual needs like police cars and fire trucks. And following a year in which Lafayette experienced unprecedented growth due to two devastating hurricanes, Durel said Lafayette can now expect even less help from the cash-strapped state or federal government.

"We have questions to ask ourselves about Lafayette Parish," he said. "Are we going to let the unnatural growth we experienced control our future or are we going to take control of it ourselves? What do we want for our future? What are the priorities?"

The post-hurricane environment is inspiring some out-of-the-box thinking when it comes to local government's revenue options. At the mayor's prompting, several historically anti-tax groups are grappling with taxes like never before.

"My sense is that, post-Katrina, given all the needs that are out there, there's a better reception [to raising taxes] than there was pre-storm," says Donna Landry, chairman of the Greater Lafayette Chamber of Commerce. "Is it good enough to tilt the scale from anti-tax to pro-tax? I think the jury's still out. But the most encouraging thing to me and the chamber leadership, I think, is that today's conversation poses multiple options."

On March 15, at a joint meeting of its transportation and government affairs committees, the chamber is scheduled to look at multiple local tax options that could provide a new revenue stream for building more roads to ease traffic congestion. The committees plan to study a variety of options, ranging from traditional property and sales taxes to a possible local gasoline tax, housing development fees and Tax Incremental Financing programs.

Landry says most people within the chamber leadership share the two premises set forth by the mayor: that Lafayette has a number of needs and that the state government is less dependable for those needs than ever before.

"I think generally speaking people have crossed the first two hurdles," Landry adds, "and now they're standing on the precipice of the cliff going, 'OK, so if we say we have all these needs and we trust ourselves to come up with it, what's the most acceptable or least uncomfortable way to do it?' And that's where we're at."

While she stops short of saying the chamber is leaning toward supporting an increase in local taxes, she acknowledges she has not heard any solutions that don't involve some form of taxation.

"Just the fact that there are multiple options on the table is progress," she re-iterates. "It's a conversation that has to happen."

The Republican Parish Executive Committee is also meeting this week to discuss funding options for transportation. Committee member Don Bertrand says that although the party is typically opposed to taxes, many local Republicans are open to taxes that remain local, as opposed to going to Baton Rouge.

"Lafayette has historically been progressive in that way," he says. "If the investment was going into the community, they're more likely to tax themselves."

One of the more popular options, a local gas tax, may ultimately prove to be impossible. The Louisiana Constitution prohibits municipalities from taxing gasoline. A change in the constitution would require approval from the state Legislature and a statewide election.

Already, three advisory committees within Lafayette city-parish government have adopted a resolution asking the state Legislature to allow municipalities more options for local taxes, including a local gas tax, to fund transportation needs. The resolution should come before the city-parish council next month.

Bill Fenstermaker, president of engineering firm C.H. Fenstermaker & Associates, says a local gas tax would be the best way to fund transportation improvements, but he's open to other possibilities.

"As a person who is normally a negative tax person," he says, "I would hope that provided the monies are committed to arterial infrastructure projects, that if [local government] can't get the money any other way, that they ought to propose some form of taxation to make it happen."

Fenstermaker, an active Republican and past chamber chairman, says as much as he frowns on paying more taxes, he envisions the alternative ' where traffic gets more congested and stymies development ' could be worse.

"[If] we think the traffic is bad today, we should have worried about this five to 10 years ago," he says. "So five years from now it should be pretty unbearable. So yes, I think that the business community especially, and all of the community, should worry about it and put it as a high priority."

Another prominent local Republican promoting a more pro-active approach to the parish's growth is Tax Assessor Conrad Comeaux.

"People don't like to talk about taxes," he says. "Unfortunately, it's just a fact of life that somehow you have to pay for growth. This has been neglected for too long, and now we're paying the cost. Traffic is only going to get worse and worse."

Comeaux watched several parish property taxes drop over the past decade while Lafayette continued to grow. Under the previous city-parish administration headed by Walter Comeaux, several millage taxes dedicated to infrastructure improvements including roads, drainage and the parish courthouse were reduced. And due to laws that lock in property tax rates after five years, it would now require an election to roll millages back up to their previous levels.

All told, Comeaux shows how the parish could have collected $17.2 million more in infrastucture-related taxes had it not rolled back millage rates. He says this money could have gone a long way in helping to deal with some of the issues currently facing the parish.

"People want [government] to roll down millages," he says. "But look what happens. You can't keep up with the increases in costs of health care, construction, pay, retirement, everything that goes into running local services.

"If you just keep sweeping things under the rug," he adds, "pretty soon you're going to have a pretty big pile under the rug that you're going to be tripping over, and unfortunately that's what this administration is facing."

Comeaux is already looking ahead to six millage taxes set to expire over the next two years. He is advocating that all of these taxes ' and any possible increase that local government may want to consider ' be put on the ballot this year. He warns that renewing these taxes could get more complicated next year when city-parish councilmen and school board members are up for re-election.

For now, Durel is still weighing the options. In addition to exploring a local gas tax, he wants to see if Lafayette can leverage local funds for more federal dollars ' capitalizing on the state's inability to come up with its own matching funds for grant money.

"Until I satisfy myself with some things I'm just not ready to go to the tax thing," he says. "I'm not excited about raising taxes, but I'll do what the community asks me to do."

Following up on his state of the parish address, Durel has been touring the parish to speak with community and business groups over the next two months about what their priorities are.

"The feedback is pretty consistent," Durel says. "Lafayette has a strong history of not depending on other people to move it forward. That's the mood that I'm getting from people, is that we can't sit back and wait for the state."