Lafayette Parish faces possible cuts to rural services and projects as sales tax collections plummet during economic downturn _lowres

 

City-parish government’s sales tax collections in unincorporated areas of the parish are off nearly 27 percent this budget year, raising the specter of possible cuts for rural services and projects.

The ailing oil patch has dampened nearly every facet of the economy, but unincorporated Lafayette Parish, with a tax base that relies heavily on industry, has been hit particularly hard.

The downturn comes at a time when the budget for rural roadwork and drainage projects is already tight.

“If the sales taxes continue to decline, we are going to have to cut something,” Lafayette City-Parish Chief Financial Officer Lorrie Toups told the City-Parish Council’s Finance Liaison Committee on Thursday.

Toups said it is still too early to say what, if any, cuts might be needed.

Sales tax collections within the city of Lafayette also are down but to a lesser degree, and the city has built up a substantial financial cushion of savings from when the local economy was humming along before the price of oil plunged.

“I think we are going to be all right, especially on the city side,” said Councilman Kenneth Boudreaux.

Sales tax collections in the unincorporated areas of the parish were already down 13 percent when comparing the 2014-2015 fiscal year with the year before.

For the first two months of the current budget year, which began Nov. 1, revenue from the 1-cent local tax collected in rural areas of the parish was down 26.6 percent, or $262,803.

That’s substantial, considering total collections for last fiscal year were $5.8 million, and the parish could be looking at several more months of losses.

“The parish general fund is still struggling,” Toups said, adding a note of optimism that one big industrial project in the rural areas could improve prospects.

Within the city of Lafayette, revenue from the 2-cent local share of the sales tax was down 4.5 percent — or $616,754 — since Nov. 1 when compared with the same period a year ago.

The dollar amount of the loss is larger than in the unincorporated areas of the parish but represents a much smaller percentage of the budget for the city, which took in $82.5 million in sales tax revenue last fiscal year, roughly 14 times the revenue from rural areas.

City-parish government has yet to receive tax figures for December sales, because collections lag a month behind.

“I think we all agree that looking at Christmas sales is going to be a big indication of what we need to do with the budget,” Toups said.