The French Quarter Economic Development District approved its 2022 budget on Thursday with little controversy, after more than a year of back and forth between the French Quarter Management District and Mayor LaToya Cantrell over the control of more than $2 million in sales taxes collected by businesses in the historic district.
The entire $2.3 million budget is dedicated to the supplemental police patrol program, formerly called the French Quarter Task Force, which pays off-duty officers to patrol the French Quarter and some surrounding areas. The revenues come from a dedicated .25 percent sales tax levied by the French Quarter Economic Development District, or FQEDD, after French Quarter residents voted to approve it in April. The FQEDD is a state-created body governed by the seven current New Orleans City Council members.
Despite months of jockeying between the FQMD and the city, and their current joint responsibility over the program, Thursday’s meeting was calm and cordial. That’s partially because, according to city economist Eric Smith, there wasn’t much to fight about this year.
According to the ballot measure approved by voters in April, the first $2 million of the tax proceeds need to be used for supplemental police patrols. Anything above that can be split between the patrols and initiatives to address other French Quarter quality-of-life issues, including homelessness. But given the low amount of revenue estimated next year as the city continues its economic recovery from the coronavirus pandemic, Smith said all the money is simply being put into the supplemental patrols.
“We really haven’t had any issues with this year’s budget, because as you can imagine, our estimations of what the sales tax is going to collect this year pretty much caps it at only providing services for the supplemental police patrol,” Smith said. “So we are pretty much just budgeting for that, so we didn’t really have anything to fight about this year.”
The FQEDD sales tax was first approved by voters in 2015 and expired at the end of 2020. For that entire time, the tax was used for a single purpose — Louisiana State Police patrols in the French Quarter area.
In 2020, as the city started work to renew the tax, two competing visions emerged on how the city should use the proceeds — one from the Cantrell administration and another from the FQMD. Neither of those plans involved the State Police, which has been criticized for being too expensive and has faced extensive allegations of racism and police brutality in New Orleans and across the state.
The Cantrell administration wanted to use the money to fund a new Ground Patrol Division it created within the Office of Homeland Security and Emergency Preparedness. It wanted to use half the FQEDD funding for police patrols and the other half for Ground Patrol Division civilian employees, who would focus on quality-of-life issues.
That plan went hand in hand with a proposed law Cantrell is backing that would allow the police to deputize civilian employees to issue municipal court citations for certain laws. That is still pending passage by the City Council.
The FQMD criticized that plan, saying that more money needed to go to certified police officers rather than civilian patrols. The FQMD instead wanted to use the money to fund a program it had administered since 2016 — the French Quarter Task Force.
The FQMD had previously paid for the task force with an annual $1.2 million contribution from New Orleans and Company — a publicly funded marketing agency for the city’s tourism industry. But citing financial hardships caused by the coronavirus pandemic, New Orleans and Company stopped those payments and ended the agreement early in June 2020, leaving the task force with no funding.
FQMD wanted to use the FQEDD revenues to replace the lost task force funding, and they also wanted formal control over the funds. Cantrell administration officials said it was unacceptable to give control over millions of dollars in public funds to an unelected board.
The city rejected the FQMD plan, and attempted to work with the FQEDD to renew the tax before it expired at the end of 2020. The FQEDD went forward with Cantrell’s plan and approved a ballot measure in December 2020 asking French Quarter residents to renew the tax.
But FQMD opposition to the plan proved fatal. The board wouldn’t support the tax, and encouraged their members to vote against it. The ballot measure ultimately failed in a 67 percent to 33 percent vote, and the tax expired at the end of 2020.
After that, the city took a back seat and the FQMD started working directly with the FQEDD to pass a new ballot measure to restart the tax. The new ballot measure secured the FQMD’s major priorities by ensuring that the first $2 million of the tax revenues were dedicated to certified police officers, and giving the FQMD explicit administrative authority over the funds.
The April ballot measure was approved.
The tax was supposed to begin in July, but more disagreements between the city and the FQMD ended up delaying that until October.
One central issue was that the FQMD wanted hotel room sales to be exempt from the tax, which would lower estimated revenues by an estimated $500,000 a year. Hotel room sales were held exempt from the previous tax from 2016 to 2020, although the legal justification for that exemption isn’t entirely clear.
This time around, there was more attention on the hotel exemption. The State Bond Commission as well as a legal opinion from the Cantrell administration indicated that there was no way for FQEDD to create a specific exemption just for hotel room sales. When the city refused to sign off on the exemption, the FQMD requested a delay in implementing the tax for three months. That delay reduced revenues by another $500,000.
After FQMD urging, the FQEDD ended up approving the hotel exemption in August without fully explaining its legality, and the tax went into effect in October.
The FQEDD and city also butted heads over who controlled the annual budget. Although FQMD was given administrative power over the money in the ballot initiative, the Cantrell administration was still hesitant to cede control over public funds.
In the end, the Cantrell administration was able to finalize an agreement that maintains a role for both the mayor and FQMD in presenting a draft budget to the FQEDD, but gives ultimate authority to the City Council.
Under the agreement, the FQEDD budget is written by the mayor’s Chief Administrative Officer and approved by the FQEDD. The CAO is supposed to draft the budget “in close collaboration with the FQMD.” That draft is then presented to the FQEDD by the FQMD, along with any notes or requested changes from the FQMD. The FQEDD will then give final approval to the budget and decide whether or not to incorporate any of FQMD’s suggestions.
That process played out on Thursday with very little controversy, with no disagreements between the city and FQMD. If there are any disagreements between the two on future budgets, the City Council will ultimately have to decide which version to go with.
“It’s been a long haul getting this here,” Councilwoman Kristin Palmer said at Thursday’s meeting.
Update: This story has been updated to clarify that the ultimate authority over the FQEDD budget is the FQEDD board, which is made up of all seven current City Council members. The mayor and FQMD share responsibilities over presenting a draft budget to the FQEDD board for its approval.