A new report from national public accounting firm Carr, Riggs and Ingram released this morning by those behind the effort to incorporate the city of St. George shows the proposed municipality would operate with an annual budget surplus of $11.4 million.
The finding is in stark contrast to a St. George budget analysis commissioned by BRAC and conducted by Faulk & Winkler that was released in December. That analysis showed a new St. George government, if formed, would have to increase property taxes by at least 20.5 mills to help cover an annual operating deficit of $12.6 million.
“Our conservative view of revenues available and expenses required to operate the city clearly indicate a tax increase is not necessary,” says CRI Partner C. Donald Wheat in a press release issued this morning by the Committee to Incorporate the City of St. George. “After careful evaluation of the revenue generated by the city, primary sales tax and the cost to run a modern, competitively contracted form of government, we can conservatively estimate a budget surplus in excess of $11.4 million.”
In December 2013, BRAC commissioned a team of LSU economists led by Jim Richardson to examine how the incorporation of St. George would affect Baton Rouge’s finances. The study concluded, among other things, that the incorporation of St. George would deprive the city-parish of 40% of its sales tax revenue and create a $53 million shortfall in its budget.
The CRI report says the negative impact to Baton Rouge would not be as significant, with incorporation of St. George creating a $17 million loss to the city-parish’s annual budget.
“This would create an operating deficit in its General Fund of approximately $14 million, which is approximately 6% of the total Baton Rouge General Fund revenues,” the report says. “Such amount should not result in an increase in taxes and could be minimized during the incorporation transition period, which is expected to take two to three years, by normal employee attrition and retirement, and/or a reduction in the scope and related costs of vendor/professional contracts that provide services no longer needed or need at a reduced level by the City of St. George.”
The report is being released as the St. George supporters work to get the nearly 2,700 more signatures needed to put their incorporation measure on the ballot. On March 28, the East Baton Rouge Parish Registrar of Voters determined the petition the movement’s supporters submitted last October had fallen 2,694 signatures short of the 17,859 needed to bring the measure to a vote of the people. State law, however, gives organizers 60 days to collect more signatures. The deadline is May 28, and St. George spokesman Lionel Rainey says he’s confident the group will get the required signatures.
Rainey says the CRI report confirms what the St. George supporters have been saying all along: the new city of an estimated 107,000 people could be established without the need to raise taxes and could operate with a budget surplus.
“We have stated from day one that we would not have to raise taxes to run a modern, competitively contracted form of government,” says Rainey in the release. “We are pleased to have that verified by a regional public accounting firm with the stature of CRI. We reject any notion or intentional misinformation presented to the public to the contrary.”
See the complete report by CRI.
—Steve Sanoski
