Opponents of the city of St. George released a follow-up report Wednesday disputing the findings of a financial study released last week that stated the proposed new city would not have to raise taxes.
The latest report, which is the third to have come out since December, estimates St. George would have a budget deficit of about $1 million.
Last week, St. George organizers released a report conducted by national CPA firm Carr, Riggs and Ingram that stated the new city of St. George would have a surplus of about $11 million annually and would not have to raise taxes.
The CRI report was in response to a December study by the local CPA firm Faulk and Winkler, which was hired by the Baton Rouge Area Foundation and Baton Rouge Area Chamber.
The Faulk and Winkler report stated that St. George would have to raise property taxes by at least 20.5 mills to cover city operational costs and build schools to accommodate the number of students living in the area.
St. George opponents immediately took issue with the CRI report, noting that the St. George report did not mention whether taxes in the area would have to be raised to build new schools for a companion school system associated with the new city.
And the mayor’s staff noted that the CRI report appeared to erroneously include in St. George’s revenues tax dollars from other parts of the parish that it would not have access to.
On Wednesday, Faulk and Winkler released a three-page report that essentially backed up the contention of the Mayor’s Office. The accounting firm says the St. George-backed report overestimates its budget by $12.5 million because it includes sales tax revenue from the industrial corridor and Towne Center retail area that would not be available to the new city.
Phillip Rebowe, a partner with CRI, said he disagreed with the city-parish’s response. He said he thinks CRI’s method of calculations would have adequately removed those sales taxes from the budget. But even if he’s wrong, Rebowe said, the deficit the new city is alleged to sustain is small enough that adjustments in discretionary spending could be made.
St. George organizers’ latest budget project estimates annual city expenses of $54 million. It also projects $65.5 million in total revenues with $59 million coming from sales taxes.
The absence of $12.5 million in sales tax, noted by Faulk and Winkler and city-parish officials, means that St. George could be short by a million dollars.