The Lafayette City-Parish Council will vote Tuesday on an ordinance for final adoption that, if approved, would repeal a 2 percent rebate businesses within the city of Lafayette and unincorporated parts of the parish receive for remitting sales taxes to the school board in a timely manner. The council voted unanimously two weeks ago on the ordinance, although it was among several introductory items voted on at once and there was no council discussion on the merits of the ordinance. This time around promises to be different.

The rebates are offered on three long-standing sales taxes — two levied in the city (approved by voters in 1961 and 1985) and one collected in the unincorporated parish (approved in 1972) — and according to documents associated with the ordinance, the rebates cost city coffers more than $1.5 million in 2011 alone.

In a memorandum to the council, Director of Traffic and Transportation Tony Tramel notes:

It appears the 2% rebate provision to vendors was included in the original ordinances to appease the retail community, regarding their effort to collect, administer and remit the approved sales tax. Specifically, 2% of the total sales tax collected by each vendor is rebated to the business, if the sales tax is provided in a timely manner to the Lafayette Parish School System Sales Tax Division.

Recent opinions from our City-Parish attorneys indicated government cannot donate anything of value to others, which raises the question as to why/how LCG can rebate/donate sales tax dollars to local businesses, notwithstanding the approved original ordinances which permits [sic] this action.

Tramel points out that four governmental bodies in the parish — the school board and cities of Carencro, Scott and Youngsville — eliminated similar sales tax rebates as recently as 2011.

Read the full ordinance here.

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