In this photo, a woman advocates for the proposed city of St. George. The Registrar’s Office will soon determine if the petition for an election to create the city is valid. Advocate staff photo by RICHARD ALAN HANNON
Opponents of the city of St. George released a follow up report Wednesday disputing a financial study released last week that stated the proposed new city would not have to raise taxes.
The newest report, which is the third of three that have come out since December, estimates St. George would have a budget deficit of about $1 million.
Last week, St. George organizers released a report conducted by national CPA firm Carr, Riggs and Ingram that stated the new city of St. George would have a surplus of about $11 million annually and would not have to raise taxes.
Their report was in response to a December study by local CPA firm Faulk and Winkler, hired by Baton Rouge Area Foundation and Baton Rouge Area Chamber, which stated that St. George would have to raise property taxes by at least 20.5 mills to cover city operational costs and build schools to accommodate the number of students living in the area.
Immediately, St. George opponents took issue with the CRI report. They decried the fact that the St. George report did not mention whether taxes in the area would have to be raised to build new schools for a companion school system associated with the new city. And the mayor’s staff noted that the CRI report appeared to erroneously include tax dollars from other parts of the parish in St. George’s revenues that it would not have access to.
On Wednesday, Faulk and Winkler released a three page report that essentially backs up what the mayor’s office already stated. It says that the St. George-backed report overestimates its budget by $12.5 million.
“The issue with the Committee’s forecast is that the industrial tax payers were not removed from the tax collections base of the present unincorporated area,” the most recent Faulk and Winkler report states. “As this group is identifiable and will not be included in the proposed City, the related sales tax receipts were excluded from the sales tax base to forecast sales tax receipts for the proposed incorporation.”
The CRI report, from St. George organizers, also assumed that it would collect sales taxes from Towne Center.
Phillip Rebowe, a partner with CRI, said he disagreed with the city-parish’s response. He said he thinks CRI’s method of calculations would have adequately removed those sales taxes from the budget. But even if he’s wrong, the deficit St. George is alleged to sustain is small enough that adjustments in discretionary spending could be made.
St. George spokesman Lionel Rainey said the group stands by their numbers and their report.
“We didn’t use a local firm that can be influenced by politics,” he said. “We used a firm that audits over 450 municipalities annually. This is just another thinly veiled attempt to prevent this from coming to a vote.”
St. George organizers’ latest budget project estimates annual city expenses of $54 million. It also projected $65.5 million in total revenues with $59 million coming from sales taxes.
The absence of $12.5 million in sales tax, noted by Faulk and Winkler and city-parish officials, means that St. George could be short by a million dollars.
There is one week left before the group is due to turn in at least 2,700 signatures from registered voters supporting the city to bring the incorporation issue to a vote.
A petition was turned in last October for St. George’s incorporation, the largest drive in state history, but it came up short in signatures. If the organizers cannot secure the shortfall by May 28, the petition will be voided.
The issue of whether St. George would have to raise taxes has been used ammunition by opponents of the movement. St. George leaders have maintained they’d run a more efficient government that wouldn’t require additional taxes to operate.