While Baton Rouge city leaders try to wrap their heads around what Saturday’s successful St. George incorporation vote will mean for the city-parish, one of the many burning questions they face is how the creation of this new city will impact the city-parish budget—and how soon those effects will be realized.
St. George area sales taxes generate nearly 20% of revenues for the city-parish. Now that those revenues will help fund the new city’s budget—though it’s not clear exactly when—city-parish officials have to calculate the new fiscal reality, which likely includes cuts to numerous departments.
That said, the 2020 budget has already been prepared without the cuts St. George will necessitate, and Chief Administrative Officer Darryl Gissel says it’s too late to redo the numbers for the upcoming fiscal year. The finance department recently completed its draft of the budget, which by law, must be presented to the Metro Council on Nov. 5 and approved by the council in December.
“We’re going to present our budget to the Metro Council as it is,” Gissel says. “If it has to be modified later, that will be done later.”
Though the Broome administration asked all department heads in May to present a budget for 2020 that factored in the loss of St. George revenue, Gissel says those figures were used only to estimate the potential effect a St. George incorporation would have and were not used to actually create the 2020 draft budget.
But it’s no small thing. City-parish officials have previously estimated the loss of St. George tax revenues would result in a hit to the $322 million general fund budget of more than $48 million. But 55% of that general fund budget is basically untouchable because it goes to police and fire protection, so the $48 million hit takes a 33% chunk out of what the city-parish can spend to keep its other departments afloat.
“It will be a huge issue as we go through budget hearings,” he says. “How do we do this?”
In related developments, the Baton Rouge Area Chamber this morning issued a statement responding to Saturday’s 54%-46% vote in favor of St. George incorporation.
“It’s well-known that the Baton Rouge Area Chamber board of directors and many other business leaders in the community held strong concerns about the formation of a new city. Nonetheless, BRAC recognizes and respects that the voters of St. George have spoken,” the statement reads. “As things now move on, we are hopeful all leaders engaged with this issue will now come together thoughtfully to determine a path forward that yields the best and most equitable transition possible for all citizens of East Baton Rouge Parish. This transition will be complex, and nearly all facets will matter to the parish’s business and tax climate. There is much to be worked out to ensure the best possible short and long term future of the communities involved. We see today, as clearly as ever, how important it is that all citizens commit to work together to achieve the greatest good for all concerned, whether for the parish, the City of Baton Rouge, or St. George.”
St. George organizers are expected to hold a press conference later today to update their plans for moving forward.
(Editor’s Note: This story has been revised from an earlier version to correct the estimated amount of revenues the city parish projects it would lose. Daily Report regrets the error.)
