St. George organizers have increased the potential hit a new city would make on the East Baton Rouge city-parish budget, even though the proposed municipality is smaller than previously envisioned.
That's because the proposed city's number crunchers have reduced their estimate of how much money they would owe Baton Rouge.
The newly released St. George budget, prepared by Metairie-based accounting firm Carr, Riggs and Ingram, projects that incorporating the new city would cut $29 million from Baton Rouge’s general fund, while St. George would enjoy a $24 million surplus. That’s a major change from the 2015 budget that CRI prepared for a larger proposed city, which estimated that Baton Rouge would lose $14 million from its general fund while St. George would get a $9 million surplus.
A projected budget for the proposed city of St. George in the southeastern part of the parish shows that organizers expect revenue of about $5…
Philip Rebowe, who prepared the budget, said Tuesday that St. George had previously estimated spending more money on city-parish services, like criminal justice system costs, without any real basis for why. The new budget reflects the accounting firm's decision to rely on the new population figure for the proposed city of St. George: 86,000 of East Baton Rouge Parish's 447,000 residents, or 19.2 percent of the parish.
So, the budget, which calls for spending $34 million in the first year, estimates that St. George would have to pay 19.2 percent of the costs for various services, such as courts and juvenile services.
Mayor-President Sharon Weston Broome’s administration has not responded yet to the St. George budget, which calls for reducing 9 percent from the city-parish’s general fund — enough to pay for multiple departments. Broome’s administration said Tuesday they were still pulling together data for a “robust analysis.”
Critics of St. George have criticized movement organizers for lowballing the expense of incorporation and the bureaucracy they would need to create. Supporters have touted their new budget, saying it shows they won't need to raise taxes.
David Barrow, the former chief administrative officer for Central, which incorporated in 2005, reviewed the proposed budget. He questioned using the population figure for estimating certain revenues and expenses, saying in some cases it would make more sense to use other data to make the calculations.
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For example, East Baton Rouge city-parish government spent $11.7 million on its department of transportation and drainage in 2016. St. George has budgeted spending $2.24 million — or 19.2 percent of what the city-parish spent — on transportation and drainage. Rebowe said St. George could create its own department to handle transportation and drainage, hire a private company to do it, or work out a deal for the city-parish to keep providing the service.
“You’re comparing apples to oranges,” Barrow said about that transportation and drainage figure. “You need to go in and account: how many miles of roads do you have? And that’ll tell you how much roadside grass you need to cut. You just can’t base that on population of the parish. When you look at drainage, how many ditches do you have to maintain out there? It may not be a fifth of the ditches in the parish, it may be more, it may be less.”
St. George supporters recently announced that they are starting another petition drive to try to create a new city in southeast Baton Rouge. In 2015, they fell just 71 signatures short of getting the question of creating the city on the ballot.
St. George advocates are seeking both a new school system and a new city, saying that East Baton Rouge government is too inefficient and that children who are not in magnet or gifted programs cannot find a quality public education in Baton Rouge. Opponents of St. George have previously argued that the new city would result in higher taxes and lead to massive cuts to the budget that pays local police officers, firefighters, paramedics and others.
Despite their focus on schools, St. George supporters have not yet released any projected figures for a school system and none were included in the budget from CRI. Rebowe said Tuesday that their scope of work was purely to analyze city government, and that they had not studied the school issue.
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“I’m just not sure if they would have to raise taxes or if they could work with the existing millage they have now or work with capital outlay for new schools,” Rebowe said.
Asked about how St. George would fund schools, St. George legal counsel and spokesman Andrew Murrell said Tuesday that they were keeping the municipal and schools budgets separate. He said the East Baton Rouge parish school system continues to have unsatisfying results.
“There is no reason that taxes have to go up to have a great school system,” Murrell said in a statement. "Money is not the problem.”
Rebowe downplayed the potential effects of a 9 percent hit on the city-parish’s general fund. He said the city-parish could reduce its budget by 3 percent a year over a three-year transition period for St. George, and that they could use attrition and renegotiate contracts to make up for the $29 million loss.
The St. George governmental budget would mostly come from sales taxes, which CRI said would make up around $53 million of St. George’s total projected $58 million in revenue. Rebowe said they used the total sales tax collections from unincorporated parts of East Baton Rouge in 2016 to help calculate the sales tax figure for St. George. They reduced the amount to account for recent annexations, flood-related spending and the population size.
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Rebowe said St. George did not include any property taxes in its calculations because the property taxes in East Baton Rouge parish are dedicated. St. George residents would continue to pay them for services including fire protection, sheriff's patrols, libraries, parks and more.
Calculations for the other sources of revenue — including occupational license taxes, licenses and permits — for St. George may have had some errors because of the usage of population figures, Barrow said. St. George’s budget says they can expect more than $2 million from occupational license tax collections because it’s 19 percent of the collections in East Baton Rouge Parish. Barrow said those collections, though, should be based on the number of businesses in an area and not on population.
And Barrow said St. George could derive more revenue than they projected from licenses and permits, which they estimated would bring in $754,000. Barrow said the amount of growth in the southeastern part of the parish could lead to those items actually bringing in more money.