BROUSSARD — With an eye on declining sales tax revenue due to falling energy activity, Broussard officials are forging ahead with expensive infrastructure projects that should add to a growing retail sector on U.S. 90.
“We’ve been here four times,” Mayor Charlie Langlinais said, referring to past oil and gas industry slowdowns, most notably in the mid-1980s and in 2010 when President Barack Obama’s drilling moratorium shut down Gulf of Mexico activity in the wake of the BP oil spill.
Sales tax collections — a measure of economic activity — have fallen off across Lafayette Parish in the last few months.
In Broussard, the falloff was drastic. In May, receipts totaled $1.18 million, a whopping 24 percent less than in May 2014 when Broussard collected $1.56 million, according to figures provided by the Lafayette Parish School System. Things improved a bit in June, when collections that totaled $1.25 million were 11.3 percent less than June 2014’s $1.41 million.
“I look at the big picture,” Langlinais said.
The mayor laid out several projects costing millions of dollars that are ongoing or planned.
He said the city is spending $4 million to drill and develop three water wells, which will wean the city from its longtime water supplier, Lafayette.
In addition, Langlinais said, Broussard soon will start spending money to widen St. Etienne Road to accommodate development of a retail center estimated to cost $60 million. The center will be built on now-empty acreage that lies between U.S. 90 and St. Etienne, with Ambassador Caffery Parkway lying just to the south. The location will make the retail center easily accessible to Lafayette residents.
Langlinais said the St. Etienne road-widening project is capped at $3.5 million and includes drainage work and installing another road that will intersect with St. Etienne.
Future plans, which are not part of the $3.5 million project, call for nearby Moulin Road to be widened and a possible roundabout installed at its intersection with St. Etienne Road.
The retail center’s developer — Alabama-based Blackwater Resources — will start construction this fall. Langlinais said some major stores have signed on, including Kohl’s, Hobby Lobby and a grocery store that Langlinais said he could not identify.
The mayor called the project expenditures investments, which would pay off in sales tax collections in the coming years as similar projects have in years past.
As examples, he pointed to construction of the $2 million Albertson Parkway over a decade ago and to the widening of St. Nazaire Road for $3.5 million that paved the way for Home Depot, Wal-Mart and other retail stores on the east side of U.S. 90.
Langlinais said those projects generated sales taxes that paid off the initial expenditures within years. He said collections from the two developments now are providing a regular cash flow to Broussard.
He said the Blackwater Resources retail venture eventually would net Broussard $300,000 a month in revenue and draw shoppers from as far as St. Mary Parish and possibly Terrebonne Parish.
St. Mary Parish, with its economic center of Morgan City, and Terrebonne Parish, which has Houma, are home to oil and gas service companies that employ residents who now are weathering the slowdown in the oil and gas sectors.
“I’ve talked to a few other parishes, like St. Mary and Terrebonne, and they’re all experiencing downturns,” said Bob Simpson, director of collections for the Lafayette Parish school district, which collects sales taxes for the entire parish.
Simpson said revenue in all of Lafayette Parish that had been climbing started to stall as 2015 marched along.
“It’s been kind of shaky for the last six months,” he said. “But it really hit home these last two months.”
The price for a barrel of U.S.-produced oil has fallen over 50 percent in a year, causing producers to curtail the spending that south Louisiana service companies depend on. On Tuesday, West Texas Intermediate crude for August delivery hovered in the $53 to $54 range, according to CNBC.com. In June 2014, the price per barrel of WTI topped $100.