Update: The tobacco tax bill was killed in committee Wednesday morning, and the House did not take up the hotel tax. Read the live blogs below for details.
Two taxes that would shore up the New Orleans city budget will be heard in the Legislature on Wednesday.
A bill to impose an 80-cent tax on tobacco products will be heard Wednesday morning in a House committee. A bill to raise the city’s hotel tax by 1.75 percentage points will be debated Wednesday afternoon on the House floor.
I’ll live-blog the debates below.
Both plans, if they survive Wednesday’s votes, still would have to win Senate approval and pass muster with Gov. Bobby Jindal.
New Orleans Mayor Mitch Landrieu is pushing the plans to reform the Police Department, clean up the city’s jail and fund the firefighters’ pension fund. The city needs up to $40 million a year to pay those court-ordered expenses, Andy Kopplin, the city’s first deputy mayor, told The Lens two weeks ago.
Landrieu is also pushing a bill that would increase the portion of property taxes that pay for police and fire services.
Each of the taxes would have to be approved by New Orleans voters before taking effect.
Second try on cigarette tax
The cigarette tax was defeated last week by a single vote, but its sponsor, state Rep. Helena Moreno, D-New Orleans, will try again before the House Municipal, Parochial and Cultural Affairs Committee.
Moreno said two supporters were absent when the committee voted — legislators have to leave if one of their bills is taken up in another committee room — and she has lobbied opponents to change their minds.
“I still expect the vote to be close,” she said. “Big Tobacco is one of the most powerful forces in the Legislature.”
The Louisiana Retailers Association and the Louisiana Oil Marketers and Convenience Store Owners Association also oppose the bill.
Moreno’s bill initially proposed a 75-cent tax on tobacco products, but at her request, the committee amended the bill last week — before defeating it — to add 5 cents and direct that money to economic development and health care.
A 75-cent tax would generate $25 million a year for the city, according to a legislative fiscal analysis. Adding 5 cents would add another $2 million, Moreno said.
Hotel tax opposed by New Orleans tourism leaders
The hotel tax passed the same House committee last week on a single vote, over the opposition of New Orleans’ tourism industry and Lt. Gov. Jay Dardenne, who oversees the state’s tourism and marketing efforts. Over the weekend Dardenne ran ads on Facebook against the tax, saying it would “destroy Louisiana tourism and & cost thousands of jobs.”
Stephen Perry, who is president and chief executive officer of the New Orleans Convention and Visitors Bureau, said the tax – if approved by voters – would make New Orleans second only to New York City in overall hotel taxes among major destination cities.
State Rep. Austin Badon, D-New Orleans, the bill sponsor, said Perry and Dardenne are engaging in “scare tactics.”
“The tax rate in New York didn’t scare away the Super Bowl” this year, Badon said.
Two other tax increases in play
Landrieu is pushing another tax that appears likely to pass the Legislature because it faces only one more hurdle: approval by the full Senate. The proposal, HB 111, by state Rep. Walt Leger, D-New Orleans, would allow voters to nearly double the current property taxes that fund fire and police services. It would raise up to $34.5 million by 2018.
The Lens has created a property tax calculator to tell you how much more you would pay under different scenarios.
Landrieu is pushing a fourth tax plan. It would create a special riverfront taxing district around the former World Trade Center building, which the city wants to redevelop. The basic plan calls for the city to keep the portion of sales and hotel taxes that would go to the state.
State legislators told The Lens on Tuesday that they have yet to see the mayor’s exact proposal, which has not yet been heard before a legislative committee.