Tax Increment Financing districts have become a blazing topic in Lafayette in recent months, sparking heated debates over a now defunct plan to fund Parc Lafayette with additional site-specific sales taxes — and an ordinance that if approved at tonight’s City-Parish Council meeting will effectively block the creation of any new taxing districts without first heading to a ballot for voters to decide.
City-Parish councilmen Jared Bellard and William Theriot are behind the ordinance to adopt the new “council policy” — it has to be named as such because the council cannot override state laws that allow for TIF districts without a public vote — which if passed would pacify the Tea Party of Lafayette — and potentially stifle development in areas that need an economic boost.
TIFs have been used for years across the state and in north Lafayette for the shopping center along Louisiana Avenue at I-10. The additional penny sales tax shoppers pay at the shopping center is used to fund the infrastructure that was needed for the site to come to fruition.
City-Parish President Joey Durel has long argued that economic development districts, like Parc Lafayette would have been, have no residents living within the boundaries, so the additional sales taxes are imposed only on those who choose to pay them by shopping there.
But the TEA Party opposition to Parc Lafayette stems from the notion that a new taxing district would have helped to fund a chic retail center and a luxury hotel in the most commercially appealing part of town instead of aiding in the development of blighted and under-served areas.
As Bellard and Theriot rally support for their no new tax measure, the debate over TIFs and how the public gauges its support for them is a hot-button issue erupting beyond the confines of Lafayette.
In Baton Rouge, TIFs have been used to build two separate hotels, one at the “abandoned eyesore” that once housed Capitol House downtown and the other to turn The Hotel King into the Hotel Indigo, according to The Baton Rouge Business Report
. The Metro Council also recently approved a third taxing district to help fund a 137-room, downtown Hampton Inn & Suites, a move that, much like Parc Lafayette, faced opposition from the city’s hotel and lodging lobby:
The typical case for public support of private projects is that sometimes a boost is needed to jump-start a worthy project. If the project has a public benefit, like revitalizing a downtrodden area of the city, and spurs further private development, then the cost to taxpayers is worthwhile. But if it’s feasible without public help, or does little for the overall economy while poaching from existing businesses, that argument falls apart.
There certainly is a precedent, but is there ever a limit? Should every new hotel receive a boost from taxpayers?
In Iberia Parish, the Iberia Parish Council recently approved additional sales taxes for a 10-acre TIF that will help to fund a private retail center being developed by local businessman Chris Jordan. The Daily Iberian
reports that parish officials took heat from concerned residents during public meetings, another striking similarity to Lafayette’s tiff over TIFs:
Iberia resident Richard Boutte, a regular attendee of council meetings ... told the council he did not think it was proper to use taxpayer money to bankroll private developers.
Tea Party member and parish resident Ruben LeBlanc ... challenged the legality of TIFs and pointed to what he claimed was a worst case scenario, the state of California, which LeBlanc said now boasts more than 400 TIFs.