Mayor LaToya Cantrell is not giving up on her plan to pay for infrastructure upgrades by tapping some of the sales tax money that goes to four area tourism and hospitality entities. She makes a good argument, but state law and politics are stacked against her, at least for now.
The city's infrastructure needs are enormous and indisputable, particularly as regards the troubled Sewerage & Water Board (S&WB). Then there are the streets. I could go on, but you know the score.
Heronner says the city needs at least $80 million a year to pay for improvements, though the city doesn't yet have a comprehensive plan that breaks down specific projects and costs. It's just kind of understood that New Orleans needs more than it has or hopes to have.
Facing political pressure to share some of their hotel tax revenue with city agencies, New Orleans tourism leaders on Thursday proposed an alt…
Cantrell's proposed solution is to tap a portion — not all — of the locally generated sales taxes that currently go to the New Orleans Tourism Marketing Corp. (NOTMC), which is a city agency; New Orleans & Co. (formerly the Convention and Visitors Bureau, or CVB), which is a private entity; the Mercedes-Benz Superdome, a state entity; and the Ernest N. Morial Convention Center, also a state entity. Cantrell says those agencies currently get $200 million a year, and some of it should be shared with the city.
(Full disclosure: From 2001 through 2009 I was a board member of the then-CVB; I have had no ties to the group since then.)
A big part of her argument is aimed at the convention center, which has a large reserve fund. Tourism officials say the fund is required by bondholders and needed for future improvements to keep the city competitive with other major host cities. Ditto for the Superdome, which will host the 2024 Super Bowl.
Because sales taxes must be approved by the state Legislature, Cantrell's plan to redirect any of those revenues would require state approval. Her initial request a few weeks back fell flat when Gov. John Bel Edwards came out against it, but the mayor hasn't given up.
Perhaps bowing to some public pressure, tourism leaders on Dec. 6 made a counter-offer: a new half-penny-plus hotel tax that would generate $6.7 million a year and support a one-time $81 million bond issue. That proposal, too, would require legislative approval in the 2019 session, which comes just months before lawmakers face re-election.
Cantrell was underwhelmed, calling the hospitality industry's offer a "first step" that was nonetheless "inadequate."
"We're not asking anybody for a favor," Cantrell said in a news release. "Last year, our people generated more than $200 million in hospitality revenue — but less than 10 percent of that came to the city."
She pledged to "continue to fight." Considering the steep climb any tax measure (even one backed by hospitality leaders) would face in an already tax-averse Legislature, one has to wonder how and where she intends to plant the flag.
My guess is that the four groups and Team Cantrell are talking behind the scenes. Publicly, both sides are talking past each other to the press and the voters. Hopefully, the private discussions are going better.