DONALDSONVILLE — City councilmen voted 4-0 Tuesday to accept a proposal that could lower by 1 cent the sales tax rate in a key commercial section of the city.
Councilman Lauthaught Delaney Sr. was absent.
Currently, the tax rate is at 11 cents on the dollar for businesses within the 750-acre area along La. 3089. That area includes a Wal-Mart Supercenter, Wendy’s restaurant and Walgreens Pharmacy.
The tax rate jumped 2 cents on April 1, after an agreement among the city, Ascension Parish government and the Ascension Parish Sheriff’s Office expired.
Under the proposal the council accepted Tuesday, both the sheriff and the parish would lower their collection by half, bringing the total amount collected down to 10 cents on the dollar in perpetuity.
The proposed agreement still must be approved by the Ascension Parish Council, Mayor Leroy Sullivan Sr. said, and the lower rate could not be enacted before the new fiscal quarter begins Sept. 1.
Sullivan said Tuesday that the offer from the parish and the Sheriff’s Office came as a counter to the city’s proposal to bring sales tax back to the 9 percent rate charged under the previous agreement.
“We’re not getting exactly what we wanted, but we won’t lose any money on this deal,” Sullivan said after the meeting.
The original 10-year collection agreement among the entities was struck when Donaldsonville annexed the property in 2004. In that agreement, the parish and sheriff gave up a combined 1 cent of their collection rates and Donaldsonville gave up 1 cent, keeping the total tax rate at 9 percent.
Terms of that agreement also set a benchmark that allowed the city to collect $1.75 million per year in sales tax revenue citywide before the sheriff and parish could collect any share of sales tax from the annexed area.
The parish had been pushing for a 50-50 share in the annexed area without a revenue benchmark. Sullivan has said such a deal would cost the city $250,000 per year, while the city still would be responsible for providing services to the annexed area.
Sullivan warned that, under the new agreement, if the city would want to lower the rate further, any decrease would come from its own share of the tax revenues.