BGR Endorses Ballot Propositions That Could Generate Millions For Infrastructure

Oct 30, 2019

In a report released Tuesday, the non-partisan Bureau for Governmental Research (BGR) has endorsed three ballot propositions that would collectively generate millions of dollars in both annual and one-time funding, most of which would be spent on infrastructure projects.

A New Bond For Drainage

One of the ballot propositions would authorize the City of New Orleans to issue up to $500 million in bonds. The city has said $250 million of that would be spent on drainage and street repair projects, $225 million would be spent on public facilities, and $25 million would go toward affordable housing.

Here's the full text of the proposition:

Shall the City of New Orleans, Louisiana (the "City"), incur debt and issue up to $500,000,000 of bonds, in multiple series, each series to run not exceeding thirty (30) years from the date thereof and bearing interest at a rate not exceeding eight percent (8.00%) per annum, for the purpose of making capital improvements in the City permitted by the City's Home Rule Charter, including constructing, renovating, acquiring, and/or improving (i) roads, streets and bridges; (ii) public buildings, affordable housing facilities, libraries, and parks and recreational facilities; (iii) surface and subsurface drainage systems and stormwater management facilities; and (iv) public safety equipment, including acquiring all necessary land, equipment and furnishings for each of the foregoing, which bonds will be general obligations of the City, payable from ad valorem taxes to be levied and collected in the manner provided by Article VI, Section 33 of the Constitution of the State of Louisiana of 1974 and statutory authority supplemental thereto, with no estimated increase in the millage rate to be levied in the first year above the 22.5 mills currently being levied to pay General Obligation Bonds of the City?

If authorized by voters, the city council would then have to approve which projects that money could be spent on.

A New Property Tax for Streets, Drainage, Vehicles

The second proposal is a 3-mill property tax. That would provide about $12 million per year to maintain street and drainage infrastructure, maintain public facilities, and to purchase new city vehicles. The average city vehicle is 12 years old, according to the report.

Full text of the proposition here:

Shall the City of New Orleans, Louisiana (the "City") be authorized to levy a special tax of 3.00 mills on all property subject to taxation in the City ("Tax") for a period of twenty years, beginning January 1, 2020 and ending December 31, 2039 ($10,250,000 currently estimated to be collected from the Tax for an entire year), with the proceeds to be dedicated solely to public infrastructure in the City and to be used for the purposes of repairing, improving, maintaining and operating (i) roads, streets, and bridges, (ii) surface and subsurface drainage systems and stormwater management facilities, and (iii) public buildings and public safety facilities of the City, including purchasing related equipment and vehicles for any of the foregoing, provided that a portion of the monies collected shall be remitted to certain state and statewide retirement systems in the manner required by law?

A New Tax On Short-Term Rentals

A third proposal would increase the tax on short-term rentals, bringing them more in line with current hotel tax rates. Before the New Orleans City Council passed stronger short-term rental regulations, that was expected to bring in about $10 million dollars per year. Twenty-five percent of that total would go toward tourism promotion, and the remaining 75% would go to both the Department of Public Works and the Sewerage and Water Board.

Full text here:

Shall the City of New Orleans (the "City"), under provisions of Article VI, Section 30 of the Louisiana Constitution and other applicable constitutional and statutory authority, be authorized to levy and collect in perpetuity, beginning January 1, 2020, on short term rentals of overnight lodging in the City an occupancy tax (the "Tax") in an amount not to exceed six and three-quarters percent (6 3/4%) of the rent or fee charged for such occupancy, with approximately $10,500,000 estimated to be collected from the levy of the Tax for an entire year if it is levied at the 6 3/4% maximum, and with the proceeds of such Tax, except for a reasonable collection fee, if any, to be distributed as follows: seventy-five percent (75%) shall be dedicated to the infrastructure fund of the City created pursuant to Ordinance No. 27,986, M.C.S., and twenty-five percent (25%) shall be allocated, pursuant to a multi-year cooperative endeavor agreement approved by the City Council, to New Orleans & Company to be used to promote tourism in the City?

The city has estimated it faces a $5.8 billion funding gap to fix its streets and drainage, according to the report. BGR Vice President and Research Director, Stephen Stuart said the bond and tax propositions will not generate enough to close that gap, but, if approved “would get the city a step closer to its goal of investing what it needs to invest in streets and drainage.”

New Orleans Mayor LaToya Cantrell praised BGR’s endorsement.

“On Nov. 16, there are four important items on the ballot that will help us bring home New Orleans’ ‘Fair Share’ and cross the goal line to get the funds our city needs,” Cantrell said in a statement. “The BGR report recognizes and validates our approach to make the best use of our resources to move this City forward.”

A fourth proposition on the Nov.16 ballot would allow the city to establish a Human Rights Commission. BGR did not take a stance on that issue in their most recent report, since the group's recent work has focused on issues of government finance.

Here's the full text for that proposition:

Shall Article V of the Home Rule Charter of the City of New Orleans be amended to add Sections 5-1101 through 5-1103 thereto to create a local Human Rights Commission to safeguard all individuals in the City of New Orleans from discrimination and to exercise all powers, duties, and functions provided by applicable state and municipal law?

NOTE: The Bureau of Governmental Research (BGR) is a financial supporter of New Olreans Public Radio.

UPDATE: This story has been updated to more accurately characterize BGR's recent focus on issues of government finance.