Two years into the energy downturn, south Lafayette Parish is feeling the financial squeeze.
Sales tax revenues, a measure of economic activity, are down in Broussard, Youngsville and in the unincorporated parts of Lafayette Parish. Broussard, home to a large number of service companies and the workers they employ, has seen the biggest dip in revenue as tax receipts fell 16.7 percent over the past year. And licenses and permit fees, another business indicator, were down from fiscal 2014-15 to the just completed 2015-16.
“Unfortunately, we’ve had too many layoffs and we’ve had some people lose their homes,” Broussard Mayor Charles Langlinais said. “But that comes with the territory. If you want to be in the oil field, there’s always a correction every six or seven years.”
The current correction is two years old; the price of a barrel of oil started falling in July 2014 from its perch of over $100 to under $30 in the first part of 2016. On Friday the price of U.S. benchmark oil was between $49 and $50.
The downturn has forced oil producers and service companies to lay off thousands of workers, and some of the companies have filed for bankruptcy.
Other casualties include at least one abandoned development plan, Acadian Crossing in Broussard. The $60 million retail center was to be developed by Alabama firm Blackwater Resources on land situated in the northwest quadrant of U.S. 90 and Ambassador Caffery Parkway. Officials in early 2015 talked about a summer 2016 opening date of an anchor grocery store and several supporting retail businesses.
But a mid-June deadline to purchase the acreage came and went without Blackwater acting on it. The project’s manager, Jay Timon, is no longer with the company. A Blackwater employee last week declined to comment on Acadian Crossing.
Mayor Langlinais said the downturn was partly to blame for Blackwater pulling the plug. Other factors were uncertainty over the design of an interchange at U.S. 90 and Ambassador Caffery, and competition from the recently completed Ambassador Town Center, a $100-plus million retail complex located in a very busy part of Lafayette.
Langlinais said the anchor tenant, a well known Louisiana grocery chain, is still interested in located at U.S. 90 and Ambassador Caffery and other developers have expressed interest in spearheading the project.
“It’s going to happen,” he said. “There is no doubt in my mind.”
For now, Broussard council members are both tightening the city’s fiscal belt and proceeding with an expensive project.
The city in the next 12 months plans to spend almost $43 million, with fewer dollars spent on general government, streets and drainage, and more on police and fire protection, according to the 2016-17 budget that was passed last week. Most of that $43 million, however, is go toward completing construction of the 122-acre St. Julien Park, a sports complex off St. Nazier Road.
To balance the books, Broussard in the next 12 months plans to pull $22.7 million from the municipal savings account. Even with that withdrawal, Broussard will have $46 million in the bank, according to city figures.
Economist Loren Scott said south Lafayette Parish is located in one of the current have-not areas of Louisiana, where a significant portion of the economy is directly tied to oil and gas extraction. Those who are hurting financially live and work in the state’s energy-dependent parishes, Scott said, referring to Terrebonne, St. Mary, Iberia, St. Martin, Lafayette and Caddo parishes.
The prosperous north shore of Lake Pontchartrain, where Chevron and supply boat company Hornbeck Offshore Services are located in St. Tammany Parish, also is starting to feel the effects.
Meanwhile, Scott said, “The people in Lake Charles are wondering what all the shouting’s about.”
He said the announced industrial construction projects in southwest Louisiana total $93 billion, with projects responsible for half of that figure under construction. The projects — refining, petrochemical, and natural gas liquefaction for sale overseas — are in industries that have an inverse economic relationship with the drillers and producers of south-central Louisiana. The plants of southwest Louisiana do well when oil and natural gas are cheap.
“If you’ve got a direct connection to oil and gas,” as Lafayette Parish has, “then you’re getting hammered pretty hard right now,” Scott said.
Scott said that like southwest Louisiana, Baton Rouge and parishes southward along the Mississippi River to New Orleans, too, are seeing a boom.
“This is one of those times when it really depends on where you live,” he said.
In Youngsville, sales tax revenue has fallen, though not as far as in industry-heavy Broussard. According to budget documents, sales tax revenue in Louisiana’s fastest growing city fell 6.4 percent over the last 12 months.
But unlike Broussard, revenue from licenses and permits in Youngsville — which include the permits to build new homes in the city known for attracting families — is up 1.6 percent.
Like Broussard, Youngsville plans to dip into its savings account to withdraw $4.6 million to meet expenses over the next 12 months. According to Youngsville’s consolidated budget for 2016-17 fiscal year, the city plans to spend almost $21 million, with year-over-year increases in capital projects and fire protection.
Councilman Matt Romero said he knows Youngsville residents who’ve lost jobs in the downturn, and that spurs him on in advocating for less spending by the city.
“I do think we can still be a little more frugal with the taxpayers’ dollars,” Romero said.
Romero said the city still hasn’t landed on where the money will come from to improve and widen roads around Southside High School, which is being constructed now at the corner of Almonaster and South Larriviere roads. The school is set to open in fall 2017.
Youngsville and Lafayette City-Parish officials have talked about the funding issue for a few years, and continue to do so with new Lafayette Mayor-President Joel Robideaux.