WRKF

New Orleans Seeks More Control Of Revenue To Help With Infrastructure Problems

Apr 23, 2019

BATON ROUGE-- The House Ways and Means Committee discussed a trio of bills Monday and Tuesday that would give the city of New Orleans more control over local revenue to address its growing infrastructure concerns.

The public discussion came as New Orleans Mayor LaToya Cantrell’s Administration and leaders of the city’s hospitality industry have been unable to reach an agreement on how to pay for repairs to the city’s infrastructure.

In recent months, the Cantrell Administration has called for the hotel and tourism industries to pay “their fair share” so the city can cover late payments to contractors and tackle larger projects like updating aging pump stations that help move flood water out of the city.

Paul Rainwater served as interim director of the New Orleans Sewerage and Water Board following the August 5, 2017 floods, when a five-inch rainfall left city streets underwater.

“The city is at risk if it does not fix it’s infrastructure, have the ability to move the money around and redistribute taxes in a way that provides funding for the Sewerage and Water Board, the city will be in a crisis situation,” Rainwater said.

After a lengthy and contentious discussion, the committee advanced House Bill 522, that would reimpose a single penny of local sales tax on New Orleans hotels that was repealed as part of a 1966 agreement between state and local officials, which brought about the construction of the Superdome. Early estimates say adding back 1 percent to the local tax on hotels would generate $7.8 million in revenue next fiscal year.

Iam Christian Tucker, the president and CEO of ILSI Engineering, supports the bills and said her company continues to take on New Orleans infrastructure projects despite the city’s inability to pay for them in a timely manner.

“I understand that some legislators do not like to raise taxes or rededicate them, but in no industry, no agency, no household anywhere can anyone operate on the revenues of 50-plus years ago-- especially not in the business of infrastructure ” Tucker said.

Tucker added, “If the plumbing in your house was as faulty as New Orleans’ infrastructure, I would bet that you wouldn’t continue to spend money on your guest room before attending to what allows you to keep your toilets flushing.”

The package of bills faced scrutiny from Republican legislators and were opposed by representatives of the New Orleans hospitality industry.

Stephen Perry, president and CEO of New Orleans & Co., representing the city’s hospitality sector, said the city’s assertion that the industry is not paying its fair share is a “punch to the gut.”

“We’re the highest taxed enterprise in the state of Louisiana already,” Perry said. He added that the reason the city does not receive as much revenue directly from the hotel industry is that much of those funds are dedicated to statewide tourism and economic development initiatives.

Rep. Barry Ivey, R-Baton Rouge, suggested that the city failed to gain public support for increased local taxes to cover infrastructure projects because of a lack of trust in the its ability to properly spend the money.

With the committee unable to reach a consensus on his package of bills, Rep. Neil Abramson, D-New Orleans, decided to delay consideration on the two more controversial measures until Tuesday. Abramson added that he was encouraged by recent developments in the negotiations between the Cantrell Administration and industry representatives.

“Whatever compromise is hopefully reached will require legislation,” Abramson said. “We only have a certain amount of time in this session and if you don’t get the bills moving you run out of time to get the legislation through the process.” 

Mayor LaToya Cantrell appeared in front of the Ways and Means committee Tuesday to defend the two other measures sponsored by Rep. Abramson.  House Bill 521 would make money generated from a tax hotels place on their guests available for infrastructure projects.  House Bill 573 would allow the city to tap reserve funds of the New Orleans Convention Center.  Despite opposition from the hospitality and tourism industry, both bills advanced out of committee.

Lawmakers have until June 6 to finalize a deal.

Wallis Watkins contributed to this report.