The governing board of the French Quarter Management District voted on Monday to ask the New Orleans City Council to allow the state of Louisiana — rather than the New Orleans city government — to collect a quarter-cent sales tax meant fund off-duty police patrols in the neighborhood.
The request stems from a dispute between the FQMD and Mayor LaToya Cantrell about how the tax dollars should be used and who should have ultimate oversight authority. A similar tax that expired at the beginning of this year was used to pay for Louisiana State Police patrols in the New Orleans Police Department’s 8th District, which covers the French Quarter and CBD. But after criticism about how the State Police was using the money, the city decided to end that arrangement when it came time to renew the tax.
Cantrell backed a plan that would divide the money between off-duty NOPD patrols and city-controlled civilian patrols. Residents shot that down in the December 2020 election. The New Orleans City Council then authorized a new ballot measure using a plan that gave FQMD control over the money, despite objections from the Cantrell administration.
In April, French Quarter residents voted to reinstate the 0.25 percent sales tax, which is expected to raise upwards of $2.5 million a year. The money will likely fund the French Quarter Task Force, which pays off-duty NOPD officers to patrol the French Quarter. The FQMD has managed the task force since 2015.
But the future of the money is still up in the air due to lingering disagreements between the city and the French Quarter Management District over who should ultimately oversee the funds.
In a Monday meeting, the FQMD board voted in favor of asking the New Orleans City Council to pass a resolution that would allow the state of Louisiana to collect the tax instead of the city.
Board chair and general manager of Brennan’s Restaurant Christian Pendleton said that the board wanted a “backup plan” in case it couldn’t successfully negotiate an agreement with Mayor LaToya Cantrell’s administration and the city refused to collect the tax.
“We have been simultaneously working with the state, so should the city not want to come to an agreement on this CEA, the state is able and willing to collect the tax,” Pendleton said. “It is not my preference. I don’t believe it to be anyone’s preference on this call. But until we can move forward with the administration I believe it’s necessary that we do what we need to so that the state can collect the tax if the city won’t.”
The city could still collect the tax prior to an agreement being signed. And Pendleton told The Lens in an interview after the meeting that there had been no indication from the city that it would refuse to collect the tax when it goes into effect this summer.
“They haven’t implied that, suggested that, hinted,” he said. “This is purely out of an abundance of caution.”
He also said that if the state collected the tax, the FQMD could theoretically skirt a formal agreement with the city, but that it would still need to get City Council approval before spending any of the money.
“Assuming we have the blessing of the [City Council] with our plan, we could spend money without the city I suppose,” he said. “But that’s not in anyone’s best interest. … The primary goal is to make sure the tax gets collected. There’s no intent, there’s no desire to work around the city.”
He said that moving forward without an agreement with the city could cause issues. He said that the agreement with the city wouldn’t just govern tax remittance, it would also detail collaboration and cooperation between the city and FQMD. For example, Pendleton said that without the agreement, the task force would have to pay for officers at the same rates that private businesses pay for off-duty security details, which he said are more expensive than overtime rates.
Two board members voted against the measure, saying that the move was divisive, and would work against the ultimate goal of reaching an agreement with the city.
“It seems like every step we go we’re driving the wedge bigger,” said Bob Simms. “And this notion to let the state collect the sales tax is yet another example of that. And I think that’s a mistake.”
Robert Watters, owner of Rick’s Cabaret strip club, held a similar opinion, arguing that the city had a legitimate reason to want to retain some control over the funds.
“The city is responsible for police,” he said. “I think they have to retain some oversight and it frightens me that we’ve gotten to an impasse with negotiations”
Cantrell’s office did not respond to a request for comment.
Also on Monday, the board discussed making hotel room sales exempt from the public safety tax. Board member Steven Caputo — hotel manager at the Hotel Monteleone — said the issue was important to the New Orleans Hotel and Lodging Association. Caputo is the board chair of the association as well. A draft cooperative endeavor agreement that the FQMD recently sent to the city specifically excludes hotels from the tax, and Pendelton said that he had talked to Councilwoman Kristin Palmer about a legislative mechanism to solidify that exclusion.
“I was assured by her that this would happen, but I have not had that conversation in the last couple weeks,” Pendleton said. Palmer’s office did not respond to a request for comment.
A backup plan
A similar French Quarter public safety tax was approved by voters in 2015 and expired at the end of 2020. The tax was technically levied by the French Quarter Economic Development District, or FQEDD, which is made up of the full New Orleans City Council. The money had been exclusively used to pay for state trooper patrols.
In December, French Quarter voters rejected a ballot measure to renew the sales tax with 595 no votes to 297 yes votes. The vote was only open to residents of the neighborhood. The FQMD had come out in opposition over how the money would be spent and the fact that the FQMD would have no mandated control over it.
Neither the city nor the FQMD wanted to continue paying the State Police with those funds. The city wanted to use the money to fund additional NOPD patrols and for a civilian “grounds patrol” to handle quality-of-life issues. FQMD wanted the money to fund the French Quarter Task Force.
The task force had been funded through annual $1.2 million contributions from New Orleans and Company, a publicly-funded, private marketing agency for the city’s tourism industry. But New Orleans and Company pulled out of that arrangement due to the economic effects of the coronavirus crisis, leaving the task force without any funding source.
Less than a month after the tax renewal failed in December, the City Council voted to put another ballot measure on the ballot in April, despite objections from the Cantrell administration. This time, the ballot measure specifically said that the money would be administered and overseen by the FQMD, and that the first $2 million of the tax would have to be spent on certified police officers. Councilman Jay Banks was the only council member to vote against the ballot measure
“I’m not comfortable with having publicly raised tax dollars controlled by an entity that doesn’t have a publicly accountable individual there,” Banks said during the January. But voters approved the new ballot measure in April, and the tax is slated to begin on July 1.
The FQMD is now seeking an agreement between the city, which collects taxes for a number of agencies — including the Orleans Parish School Board and the Sewerage and Water Board — over how the money would be managed. The city sent a draft cooperative endeavor agreement to the FQMD in late March, according to Pendleton. The Lens wasn’t able to obtain the draft prior to publication.
On May 4, FQMD Executive Director Karley Frankic responded to the city with a list of objections and a revised draft CEA.
“The ballot language vests sole administration and fiscal oversight of the fund with FQMD,” the email said. “The City’s proposed language, however, only allows FQMD to ‘rubber stamp’ the City’s decisions on the budget and how the funds should be used. … The CEA must allow administration of the fund consistent with the ballot language, and the attached revised CEA aligns with the ballot language.”
The revised version gives FQMD a high degree of control over the funds.
“The biggest deal is who controls the money,” board member Jeremy DeBlieux said on Monday. “The ballot language states specifically that the FQMD controls the money. The city’s point has always been that they don’t want to see tax dollars appropriated by a body that isn’t duly elected. However, the FQMD cannot spend any of the money from the FQEDD without first approval by the board of the FQEDD, which is the City Council, which is a duly elected entity.”
In spite of the request to hand collections over to the state, Pendelton maintained that the primary goal was still to reach an agreement with the city.
“It is my understanding that Councilmember Palmer is meeting with the Mayor in the very very near future to discuss this very issue. So I can only hope she is able to move the mayor. But in the meantime, I believe we have to have a backup plan in place.”