Downtown voters have the April 30 election to themselves – during the International Festival. Early voting is already underway for the single-proposal ballot: Should Lafayette renew the property tax backing the Downtown Development Authority?
Here are the answers to the basic questions voters need to understand before heading to the polls.
What is DDA?
Public body created by the state legislature in 1992 with the assignment to foster “the physical, economic, and cultural development of the downtown district – preserving and enhancing its important place as the heart of Lafayette and Acadiana.”
What is the Downtown district?
The neighborhood boundaries represent everything most would think of downtown, but the map extends just across Johnston Street, Congress Street, University Avenue, and the train tracks. Here is the official map:
What does DDA do?
DDA operates as an economic development agency. Think of it as a tiny Lafayette Economic Development Authority. Its staff works in corporate and private development recruitment and advocates for downtown public infrastructure projects. Its staff oversees the implementation of the Downtown Action Plan, which presents a roadmap for the development of the district; connects developers with local, state and federal authorities incentives; and offers scholarships like the Retail Tenant Improvement Programthat helps retail businesses start up and grow Downtown.
DDA staff also support the operations of Downtown Lafayette Unlimited, a private non-profit organization that produces events like Downtown Alive!.
How is the DDA funded?
Mainly from a dedicated 15 mill property tax which is assessed on properties located in the DDA tax district. This mile brings about $450,000 per year.
Who pays the tax?
Only for-profit owners who own property in the DDA tax district. Schools, churches, non-profit organizations and government entities do not pay property taxes. A large portion of DDA’s footprint is made up of tax-exempt properties.
Who can vote?
Only registered voters who live within the DDA district boundaries. Downtown property owners are only allowed to vote if they reside in the neighborhood.
Is it a tax increase?
No. The current DDA tax rate is 15 thousandths. Renewal resets the maximum tax rate to 15 mills (more on that in a second). While the tax rate is higher than the previous tax rate (10.91 mills in 2007), this vote will not increase what downtown property owners pay.
But the ballot says it’s an increase. How is that not a raise?
Property tax rates fluctuate. They may increase or decrease as total assessed property values change. A mechanism provided by state law raises and lowers property tax rates to keep revenue stable for taxing authorities such as DDA.
DDA has increased its tax rate (legally) several times in recent years to stabilize its annual budget as total downtown property values have declined. Conservative anti-tax group Citizens for a New Louisiana called it in campaign mailings a “legal loophole” used to raise taxes without public approval. But that’s how all property assessments in Louisiana work. Municipal and parish councils do this regularly.
Ballot language uses the word increase, which is where the confusion comes in. Here is the relevant part of the ballot language:
The Central Commercial Subdistrict of the Lafayette Central Development District (the “District”) continue to levy and collect a special tax of fifteen (15) mills throughout the property… which represents an increase of four thousand nine hundredths (4.09) (due to revaluation) out of the 10.91 authorized mills until 2022 following an election held on July 21, 2007?
But just because the word “increase” is in that language doesn’t mean anyone’s taxes will go up as a result of this vote.
DDA’s mileage may increase or decrease in the future. For example, if total assessed property values increase, a taxing authority may maintain its mileage rate at the same level and thus increase the revenue collected. This is called “moving forward”. Or, if these values go down, the taxing authority could keep its mileage rate the same and decrease the revenue it collects.
But for now, to reiterate: DDA’s current tax rate is 15 thousandths. If the renewal passes, the tax rate will always be 15 thousandths.
Why has the total value of downtown assessed properties decreased?
Changes in the banking sector, mainly, according to the tax assessor of the parish of Lafayette. Banks have a lot of assets, namely deposits, and they are taxed like property. Mergers and branch closures removed these deposits (and other bank assets) from the tax roll.
For example, when IberiaBank was taken over by First Horizon, the new owner reduced the deposits held at the downtown branch, which reduced the amount of movable property in the downtown area.
Besides these banks, other real estate values have risen, the appraiser says, but not enough to offset these losses.
What prevents DDA from increasing its mileage beyond 15 mills?
State law prevents tax authorities from arbitrarily raising tax rates. DDA’s mileage can only increase beyond what was approved by voters when the total value of assessed properties decreases.
If total assessed land values fall again in the future, the DDA may increase its rate to keep revenue collected stable.
What happens if the DDA mileage does not renew?
For this April vote, nothing. DDA’s mileage will continue to be collected through the end of 2022. DDA would get a second and final shot at a renewal this fall. If that failed, it would probably mean the end of DDA as we know it. The tax generates over 90% of DDA’s revenue.