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Louisiana State Capitol

Shortly before Christmas the U.S. Census Bureau reported that Louisiana was one of nine states that lost population with 10,840 fewer people as of July 1 than the year before.

Louisiana births mitigated the statistics because 27,914 of the state’s 4.6 million residents moved elsewhere in the United States, according to the report. 

Fingers have been pointed ever since — mostly by Republicans blaming Democratic Gov. John Bel Edwards’ economic policies.

Entertaining, perhaps, but the invective misses a larger migration issue.

It’s not so much that some people are leaving Louisiana in the broad daylight. Far more Louisiana residents are moving to the big cities and leaving the small towns with too many bills that those remaining can no longer afford. Where 35 years ago about 31 percent of the state’s population lived in small towns, by 2017 only 16 percent did. And the U.S. Census Bureau report showed Baton Rouge, New Orleans and Lafayette metro areas still growing.

It’s a situation that fast is becoming the burden of all Louisiana taxpayers.

Well-documented problems with maintaining the pipes and pumps that deliver safe drinking water in small communities apparently are only the canary in the small-town financial mine.

Edwards formed a task force to address the $5 billion issue, and it promptly released a list of the state’s 10 water systems most likely to collapse.

The Legislative Auditor broadened the discussion by unveiling a list of the 15 towns with high financial risks. Auditors want to stabilize the downward financial slide that, if not averted, will end up costing taxpayers across the state.

“A couple years ago, we didn’t see a crisis, but now far more small systems can’t support themselves,” said Bradley Cryer, the assistant auditor in charge of reviewing the finances of local government.

Fifteen made the list, but up to 60 communities are on the brink. There are many reasons for the financial problems, but one of the biggest is town leaders trying to pay for utilities, law enforcement and other local services in communities that now have substantially fewer people and therefore far less revenues.

“These towns don’t have sufficient revenue to cover current costs,” Cryer said.

He pulls the financial statements municipalities are required to file annually and looks first at whether a town has enough money to pay its immediate bills. He then checks the longer-term expenses versus from where the revenues are coming.

Because property and sales taxes and franchise fees have dropped off dramatically in recent years, Cryer checks the revenues from utility fees, like the sale of water and the collection of sewerage. He then thumbs the lines of figures to see if a community’s elected officials are diverting money that would pay for maintaining water, sewerage and other utilities to pay for other expenses like law enforcement and salaries.

His hope is to work with local leaders before the situation gets to the point that the state needs to send an administrator who would push elected officials aside, then unilaterally raise fees, fire employees and reorganize municipal departments.

Where once no administrators had been hired by the state, they now are running Jeanerette, in Iberia Parish, and St. Joseph in Tensas Parish.

Last month, the Fiscal Review Committee started the process to ask the courts to appoint administrators to run Clayton, in Concordia Parish, and Clarence, in Natchitoches Parish.

Next week, the committee is set to decide on a state take-over of Clinton, Bogalusa and Sterlington.

Clinton has problems with its water system. Bogalusa has trouble funding its pensions.

Sterlington got into trouble trying to come up with a new revenue stream.

The 1,500 residents in the town north of Monroe voted to increase their sales tax by a half-cent to repay a loan that would build a sports complex. The plan was to build five baseball fields, five softball fields, and concession stands that would attract amateur sports tournaments.

But by December, the town failed to make a $174,655 debt service payment to Texas Capital Bank and a $44,063 payment to Homeland Federal Savings Bank.

Sterlington has a $15 million debt. The average debt of other towns of similar size and situation is $1.7 million, according to a Fiscal Review Committee report.

“When they built it, the consultants suggested money from renting it out but that didn’t materialize,” Cryer said. Which all goes to show that small-town finances are so precarious that even the best intentions can quickly lead to problems.

Municipalities having a high financial risk

  • City of Grambling
  • Town of Baldwin
  • Village of Epps
  • Village of Morse
  • Town of Eros
  • Town of Sterlington
  • City of Tallulah
  • Town of Vidalia
  • Town of Winnsboro
  • Town of Independence
  • Town of Gibsland
  • Town of Waterproof
  • Town of New Llano
  • Village of Robeline
  • Village of Quitman

Source: Louisiana Legislative Auditor

Follow Mark Ballard on Twitter, @MarkBallardCnb.