Conclusion

Parish Economic Outlook

Jefferson Parish government continues to grow but within the overall context of a parish and a region that are in a period of socio-economic transition. Once a growing suburb of New Orleans, Jefferson is itself now impacted by the growth of outer-ring suburban areas of St. Charles, St. John, and St. Tammany Parishes. But for the present, parish government revenues exceed expenditures and continue to grow at a pace ahead of inflation.

Between 1988 and 1997, growth in revenues exceeded expenditures, which combined, with conservative revenue estimates and close monitoring of spending by parish financial administrators, helped build a 1997 year-end fund balance of $59.8 million.

The great majority of these funds though are dedicated to a variety of specific parish government departments and functions limiting their use in addressing substantial changes in parish spending priorities. The parish’s 1998 undedicated fund balance of $ 4.4 million dollars (unaudited) is less than two percent of 1998 amended revenues.

But the economic picture in Jefferson may be changing:

Parish population declined 1.1 percent from 1995 through 1997. Developing

suburban areas beyond Jefferson are attracting the parish’s middle income population.

Parish per capita income is stagnant and has declined relative to the region including New Orleans.

The assessed value of taxable property declined 5.5 percent between 1988 and 1997 when adjusted for inflation. However, total taxable property assessments increased by approximately 3 percent in 1998, ahead of inflation.

Sales tax revenue, long the parish’s leading source of income, declined by 4.9 percent in real dollars between 1994 and 1997. On the positive side, collections are expected to show a 4 percent increase in 1998, well ahead of inflation.

Collectively, these trends define a maturing Jefferson Parish economy and significant challenges may emerge in the longer term.

The parish’s income from sales taxes, one third of general government revenues and 23 percent of projected operating revenues in 1999, is very sensitive to changing economic conditions. At present, the positive effects of strong national and regional economies are boosting tax proceeds, but as the national economic cycle eventually takes a downward turn, so will parish revenue.
Absent future growth in population and per capita income, or new millages, property tax income, 32.5 percent of expected 1999 operating revenue, may slow or level off over the next few years.
Many of the parish’s authorized millages, including four parish-wide taxes, will expire over the next four years and must receive voter approval for renewal. With parish per capita income stagnant, gaining voter support for existing millages may be more difficult than in the past. Adding new millages and other taxes to support parish government would present a significant challenge to parish leaders.
The trend in fund balance growth may be changing. In 1998, amended expenditures exceeded amended revenues by 2.9 percent or $7.4 million dollars, and 1999 expenditures are projected to exceed revenues by $16 million or 6.2 percent. Though these amended and projected differences will certainly narrow, it appears the parish is beginning to spend down the current budget surplus. Overall, 1999 expenditures are projected to increase by about 18 percent over 1997 outlays.

Jefferson Parish government begins FY 1999 with an impressive 1998 year-end designated operating budget balance equal to about 20 percent of projected 1999 operating revenues. This fund balance, though dedicated, will help parish government to manage through difficult economic periods.

The parish’s undesignated discretionary funds are very limited, however, calling into question the policy of allocating over $2 million in discretionary gaming revenues annually to individual council districts as Council District Improvement/Assistance Funds. The three westbank Council District Improvement/ Assistance Funds combined carry a 1998
year-end discretionary balance of $1.5 million into 1999.

Planning and development of the LaSalle tract on the eastbank is a parish bright spot as a “quality of life” improvement. Hopefully, JEDCO with a new start and under new management can play a strong role in creating economic growth in the parish.

The ability of parish government to maintain current service levels will be challenged by a continuing period of region-wide population and economic transition. Regional cooperation, planning, and new economic development can enable the parish to grow as part of an evolving regional economy.