Louisiana City Considers Tax Swap to Fund Public Safety

Lafayette officials are floating the idea of a tax swap to fund public safety, exchanging two property taxes that now support fire and police with a new half-cent sales tax.

Chief Financial Officer Lorrie Toups tells The Advocate the plan, which would need approval of the City-Parish Council and city of Lafayette voters, would result in a net revenue increase of about $10 million a year.

Lafayette Fire Chief Robert Benoit spoke to council members Wednesday to make the case for the new revenue, saying it is badly needed to build and staff two new fire stations and to raise base pay for firefighters – improvements Benoit said are needed to serve a growing city.

Without the new stations and firefighters to fill them, Lafayette’s fire insurance rating could drop next year from a two to a three, resulting in an average increase of 9 percent for homeowners insurance, Benoit said.

“There are some things we have to accomplish to maintain a class 2 rating,” the chief said.

The tax swap discussed Wednesday would apply only within the city of Lafayette.

Chief Administrative Officer Dee Stanley said the administration is not pushing the proposal but rather offering an option for the council to consider.

But Toups and Stanley also told council members that without new revenue, the city will not be able to afford the fire enhancements that Benoit is requesting.

“We are not going to be able to cut our way to make this happen,” Stanley said.

New revenue for the fire and police departments could also relieve pressure off the overall budget, which is now digging deep into prior years’ savings to cover expenses that are greater than revenues, Toups said.

City residents now pay a total of 5 mills in property taxes for police and fire salaries and related public safety expenses.

The tax plan discussed Wednesday would let the property tax expire – resulting in a 28 percent decrease in city of Lafayette millages – in exchange for a new half-cent sales tax dedicated to public safety.

Stanley said expenses for groceries and prescription drugs could be exempted.

The police and fire property taxes now raise about $6 million a year, said Toups, adding that the half-cent sales tax would raise about $16 million a year.

Stanley said that if the council approves, the tax proposal could be on the ballot as early as April.

A new half-cent sales tax would increase the city of Lafayette’s total sales tax rate to 8.5 percent.