St. George budget reveals how new city would be funded, amount of revenue Baton Rouge would lose
A projected budget for the proposed city of St. George in the southeastern part of the parish shows that organizers expect revenue of about $58 million in the first year, and that the incorporation would cut nearly $29 million from the general fund for Baton Rouge’s City Hall.
St. George supporters announced Friday that they were launching a new petition drive to create their own city in the southeastern part of East Baton Rouge Parish after an unsuccessful effort two years ago. They submitted their petition with the Louisiana Secretary of State’s Office, and now have nine months to collect signatures from 25 percent of registered voters within St. George’s proposed boundaries.
If they collect enough signatures, everyone within the proposed boundaries would have a chance to vote on whether to incorporate the new city. Both proponents and opponents raised many of the same issues as they had in 2015, when St. George supporters fell 71 signatures short of getting the incorporation proposal on the ballot.
On Monday, as they released the 11-page budget on their website, St. George organizers in a statement touted the budget as fiscally responsible.
“The report clearly states that the City of St. George would operate with a surplus and would not have to raise taxes,” they wrote on their Facebook page. “The report also indicates that the impact to the general fund would be manageable and not catastrophic, despite comments made by the mayor’s office.”
M.E. Cormier, one of the leaders of the group Better Together that helped to defeat St. George last time, questioned the group’s financials.
“Once again, this budgetary report completely excludes any expenditures associated with a new school district — their clearly stated main objective of, and motivation for, forming a new city,” Cormier said. “Zachary, Baker, and Central have all had tax increases as a result of their incorporations; to assume St. George would have none is absurd.”
The new budget and financial analysis performed by Metairie-based Carr, Riggs and Ingram CPAs and Advisers increases the expected hit to the city-parish budget compared to a 2015 study the accounting firm conducted for St. George supporters. The amount of money that St. George now projects taking from city-parish government is twice the amount as two years ago, when a study estimated that East Baton Rouge Parish would only suffer a $14 million loss.
City-parish officials have repeatedly warned that their budget is already stretched thin. The $29 million that St. George could take from the general fund is enough to fund multiple departments, and is more than half the size of the Baton Rouge Fire Department’s annual budget.
But the St. George financial report called the 9 percent hit to the city-parish’s $319 million general fund “manageable” and said the city could cut down its workforce over a two to three-year transition period.
The city of St. George would expect to bring in nearly $58.4 million in its first year, with the revenue largely coming from sales taxes. They also expect $33.9 million in expenditures and a $24.4 million surplus.
In addition to sales taxes, the budget shows St. George would also derive revenue from occupational license taxes, gross receipts business taxes, other business taxes and licenses and permits.
The St. George Fire Department would continue to provide fire service in the area, and the East Baton Rouge Sheriff’s Department would provide police protection. State law requires municipalities to have a police chief, but the budget does not account for a police department. It also does not mention the potential school system that St. George organizers have emphasized.
The accountant who helped prepare the St. George financial report said he was not available Monday to talk about the report. Mayor-President Sharon Weston Broome’s administration said they were still reviewing the budget Monday and formulating a response. Broome has opposed the creation of St. George.
Both the projected budget and footprint for St. George are now smaller than what was proposed in 2013. St. George organizers posted on Facebook that “the decision on what areas to include and not include was based exclusively on the amount of previous support for the effort.”
While the original attempt for St. George was 85 square miles, the new proposal is for 60 square miles. The smaller size is in part a result of a successful campaign by former Mayor-President Kip Holden’s administration to chip away at the size and tax base of St. George during the initial petition campaign by annexing properties including L’Auberge Hotel and Casino and the Mall of Louisiana into city limits. The new financial report acknowledges that a recent annexation of Siegen Marketplace led them to lower their projected sales tax collections by $4 million.
A state law approved since the previous petition drive prevents the city from annexing more land once the incorporation papers are filed with the state.
Metro Councilman Buddy Amoroso, whose district includes some neighborhoods in the St. George boundaries, said Monday that he would not stand in the way of the St. George incorporation movement. Amoroso said he supports the right of people to vote to create the city, though he also pushed back against calling himself a “St. George supporter.”
“If the people in the parish create a city, then we would have to deal with it,” Amoroso said about the effect to the city-parish budget. “It’s like anything else: we deal with floods, we deal with hurricanes. If a city is created, we would have to deal with it.”
St. George’s original proposed budget from 2013 was $80.8 million, again largely made up of sales taxes. They also planned back then for $60.3 million in annual St. George expenditures and a $20.5 million surplus in the original budget.
Opponents of St. George during its original petition drive dug into its financials and used its one-page budget to argue that the creation of the city would be financially devastating to Baton Rouge. The Baton Rouge Area Chamber and Baton Rouge Area Foundation commissioned a 2013 financial report from LSU economist Jim Richardson that warned St. George would take away 40 percent of the sales tax revenue funding Baton Rouge’s city operations.
Another 2014 financial analysis from accounting firm Faulk and Winkler said St. George would have to raise property taxes by 20.5 mills to cover its operations and to build enough schools for all of the students in the area. BRAC and BRAF commissioned the Faulk and Winkler report as well.
BRAC said Monday that they will review the St. George budgetary data and perform an analysis. BRAF declined to comment.