Government & Politics

Plan to create special taxing district in New Orleans dies on last day in Legislature

A last-ditch effort to create a special riverfront taxing district in New Orleans collapsed in the final hours of the legislative session Monday. Mayor Mitch Landrieu had pushed the idea as a way to raise revenue for the cash-strapped city.

The final proposal would have allowed an increase in taxes on the former World Trade Center building after it is developed and perhaps in other areas throughout the city. But watered down from its original version — and with many restrictions — the plan couldn’t win the support of a small group of House and Senate members charged with nailing down the exact language Monday.

In the end, the taxing district plan died without getting a vote in either the House or the Senate.

It was never actually part of a bill. Instead, legislators hoped to add it to another bill that never advanced. In the final days, they tried to work it into another bill to create a regional business park in New Orleans.

“We talked about our concerns and how to address our concerns,” state Sen. J.P. Morrell, D-New Orleans, said, referring to the six legislators who were on a conference committee that aimed to hammer out the specifics and bring it to a full vote. “But you can’t create any authority with the ability to tax without public vetting. You can’t just create it in conference.”

Tourism industry officials initially pushed the plan as an alternative to Landrieu’s proposal to authorize a local vote to raise hotel taxes in New Orleans. After tourism officials stopped that bill – it couldn’t get a vote on the House floor — the riverfront taxing district lost its key sponsors.

In effect, Morrell said, tourism officials “threw a half-baked idea at us and disappeared.”

The plan for the taxing district originally would have allowed the city to keep all the tax revenue once the former World Trade Center building is developed — including the portion of sales and hotel/motel taxes that normally go to the state and local public entities such as the RTA and the Orleans Parish School Board.

However, the final version considered by the small group of legislators Monday would have allowed the state to keep its share. And the city would have kept the money meant for the RTA and others only if they agreed to it.

The plan also would have allowed the taxing district to create sub-districts throughout the city where higher taxes would be levied. That would have required the approval of the residents or property owners in those areas, as well as the approval of the legislators who represent the areas.

“We all kind of agreed that it wouldn’t work out,” Morrell said. “No one was upset, as convoluted as it became.”

Landrieu had backed three bills that would help the city pay for court-ordered judgments to shore up the firefighters’ pension fund and reform the Police Department and jail.

One made it through. Voters will decide if they want to nearly double the portion of property taxes that go to police and fire protection.

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