If St. George incorporates, tax hikes will be needed, says Baton Rouge audit firm

A new report released Friday by the Baton Rouge Area Chamber and the Baton Rouge Area Foundation says that, if the city of St. George is formed, residents in that area would see their property taxes rise significantly — by $720 per year for a home assessed at $350,000.

The new taxes would be necessary to make up for revenue deficits from the annexations of much of the Mall of Louisiana and other properties, as well as to fund the building of new schools, the report says.

“The purpose of the report is to inform residents of East Baton Rouge Parish,” BRAC and BRAF said in a press release.

St. George spokesman Lionel Rainey said his group would review the report over the holidays and address it in more detail later, but that this was the start of a “political campaign” to defeat the St. George incorporation at the ballot box by claiming taxes would go up.

“We find it ironic that the same groups that have claimed we’re going to have so much money that we’re going to break the parish, now all the sudden say we don’t have enough money and we’re going to have to raise taxes,” Rainey said.

The report, from accounting firm Faulk & Winkler LLC, says the proposed city of St. George would lose almost $22 million in sales tax revenue from the city’s annexations of the Mall of Louisiana and other properties. That’s about double what St. George leaders estimate they lost.

The city of St. George will also not be receiving $7 million in gaming revenue from L’Auberge Casino & Hotel, after that property was annexed into the city earlier this year.

Mostly because of the discrepancy on the issue of how much impact the annexations would have, St. George leaders’ budget still puts the proposed city at a surplus of a few million dollars, even after the annexations. But the new report says the city would have an operating deficit of $12.6 million per year, which could force leaders to raise taxes by at least 11.5 mills.

Separately, the report says the proposed city would need another $141 million to build the schools needed to house students in the area.

St. George leaders acknowledge there’s a major shortage of schools in the area — in fact, that lack of nearby public schools is one of the main reasons supporters are pushing for a new city and school district. St. George leaders have not released a budget for the school system or details about how the construction of new schools would be funded, but have said there’s already enough tax revenue in the area to build them.

In all, the accountants’ report says residents’ taxes would have to go up by 20.5 mills, or about $720 per year for a house valued at $350,000.

The one key area the report does not examine is constitutional offices. The St. George leaders have said they plan to pay for all of the parish’s constitutional offices, which include the district attorney’s office, the coroner’s office, and more, and serve residents in both the incorporated and unincorporated areas.

The proposed St. George budget accounts for about $17.7 million in expenses for those constitutional offices, but as more properties have been annexed and more revenue stays with the city of Baton Rouge, St. George leaders have threatened to stop paying for all of the constitutional offices — potentially freeing up millions of dollars. If the city of St. George comes to be, negotiations over issues like the sharing of costs for constitutional offices will be key.

The accountants’ report also looks at how much the city would be spending on each of its residents, and finds it would be spending much less than the average. The St. George budget is about $564 per person, while cities with similar populations spend about $1,152. The. St. George police budget, for example, would be only about $3.1 million, or $29.57 per person, while average public security spending by other cities of similar size was $223 per person.

Mary Olive Pierson, the attorney representing the city of Baton Rouge in legal dealings on the St. George issue, said prior to the report’s release that a potential increase in taxes will be a major deterrent for residents considering whether to vote for the new city. The St. George incorporation effort has turned in a petition to the Registrar of Voters, and if they meet the required number of valid signatures, it could go to an election next year.

Pierson said earlier this week people will have to evaluate “how bad do I want this, how bad do I want those eight new schools we’re going to have to build.”

“‘I am convinced when people vote, it’s generally with their pocketbook,” she said.

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