Lafayette Parish businesses on Wednesday began charging an extra penny for every dollar of goods they sell — a tax voters approved in December to build a bigger, better passenger terminal at Lafayette Regional Airport.
The tax, which became effective on Wednesday, is to be levied over eight months and is expected to bring in tens of millions of dollars before it expires Nov. 30.
It comes at a cost to consumers, especially on big-ticket purchases such as vehicles. A $20,000 sale price would mean the customer pays the Lafayette-based auto dealer an extra $200 in sales taxes. Groceries and prescription drugs are not subject to the extra levy.
When it was pitched to voters in 2014, promoters of the tax estimated it would bring in $35 million to $37 million. The money will give south Louisiana air travelers a modern terminal in Lafayette with five gates instead of the current three.
Plans call for the new terminal to have space to later expand the number of gates from five to seven.
“We’re going to monitor the collections. We’ll watch what we’re getting,” said Steve Picou, who was hired in January as executive director of the airport following the June 2014 resignation of longtime director Greg Roberts.
Picou, a native of Cut Off who was deputy director at the Rick Husband Amarillo International Airport in Texas, rose above the field of 43 applicants for the director job partly because of his experience running an airport during major construction.
The Lafayette Parish tax proceeds will be poured into a fund that later will add borrowed money along with state and federal dollars to reach $90 million. The project includes expanding the parking lot and upgrading the ramp around the terminal, where planes park to pick up and drop off passengers.
Matt Cruse, Lafayette Airport Commission chairman, said that if all goes well, passengers would start boarding through the new terminal by 2019 — 2020 at the latest.
Cruse said, however, that he worries the sales tax receipts over the next eight months could produce less revenue than originally anticipated.
South Louisiana in general and Lafayette in particular could be hit by a regression in oil and gas activity brought on by a collapse in the price of oil, an industry that’s central to the region’s economy. A downturn could restrict consumer spending and bring in less money.
“I still can’t believe there’s not going to be some downturn based on the economy I live in,” said Cruse, whose family owns oil and gas service companies.
So far Lafayette Parish sales tax receipts have been going gangbusters. January collections in Lafayette Parish were $8.5 million, a 4.7 percent increase over January 2014 receipts, and February collections topped those in February 2014 by 6.3 percent.
“That is really encouraging,” said Larry Sides, with the public relations firm Sides & Associates. The firm crafted the campaign to persuade Lafayette voters to pass the airport tax, which they did with almost 60 percent in the Dec. 6. election.
Sides said that if tax collections do not reach $35 million, there are alternatives the airport can use such as borrowing more money or requesting more from federal and state sources.
Cruse said he and the airport’s six other commissioners know state funding could be tight this year. He said, however, he’s confident the airport will receive the $13 million it requested from Louisiana in this year’s capital outlay budget. Capital outlay, which pays for public projects in Louisiana, is funded through state bond sales.
“I think we have a better shot (than others) because of the amount of skin we have in the game,” Cruse said, referring to local taxpayers footing a big part of the project, and the airport’s commitment to borrowing millions of dollars.
Cruse said federal airport grants, which also will add up to tens of millions of dollars, will fund non-terminal improvements like the ramp and taxiways.