DONALDSONVILLE — City councilmen have discussed the feasibility of proposing a new half-cent sales tax that would fund infrastructure improvements, such as sewer and road work.
During their regular meeting Tuesday, council members learned that time is running short to place a proposal on either of the 2012 spring ballots.
Bond attorney Jerry Osborne, of the Baton Rouge firm Foley and Judell, told the council that placing the referendum on either the March 24 or April 21 election ballots would require all necessary paperwork to be filed by year’s end.
The state Bond Commission would then have to approve the proposal before it could go before voters, Osborne said.
Currently, a total of 8.5 percent on the dollar in sales taxes is collected on purchases within the city limits. This includes taxes levied by the state, the parish School Board, the city and a west bank hospital service district.
In the unincorporated west bank, sales taxes are collected by parish schools, the hospital district, as well as by parish government and parish law enforcement.
However, in a 750-acre area annexed into the city in 2004 that includes the city’s Walmart Supercenter, shoppers pay an additional half-cent sales tax.
Per an agreement with parish government and the parish Sheriff’s Office, the city does not collect its 2 percent sales tax within the annexed area. Instead, after meeting a benchmark, additional revenues are split among the entities, Council Chairman Raymond Aucoin said.
If a new half-cent sales tax gets approved by voters, Osborne said, the sales tax rate in the original city limits would increase to 9 percent. The annexed area would see a total 11 percent sales tax, not accounting for the tax-sharing agreement.
Osborne said state law limits parish governments and school boards from levying sales taxes that put total rates above 9 percent in any taxing district, unless authorized by special legislation.
“Under the existing legislation, they couldn’t levy an additional sales tax in the city once you levy a half-cent sales tax,” Osborne said.
State law allows municipalities to levy up to 2.5 percent in sales taxes without regard to other taxing entities, he added.
The council took no official action on the matter, but decided to continue working on the proposal in order to meet the deadline.