Potholes, water woes: New Orleans seeks more of tourist tax
By Kevin McGill
Source: The Associated Presss
December 26, 2018
NEW ORLEANS (AP) — A night’s stay at a New Orleans hotel can take as much as a 15 percent bite in taxes and fees. Yet barely more than 1 in 10 of those tax and fee dollars — out of an estimated $166 million collected annually — finds its way into city coffers in this leading Southern tourist destination.
That’s according to estimates by an independent research agency that last calculated the figure in 2015. New Orleans Mayor LaToya Cantrell’s still-new administration says the city needs and deserves a bigger share.
When Cantrell took office in May, she inherited many lingering infrastructure challenges: potholed streets, drainage problems and a drinking water system plagued by periodic boil-water advisories. But an attempt to get a bigger slice of that tourism revenue to address those needs could be a tall political order for the new mayor of this city famed for Mardi Gras, Jazz Fest, Bourbon Street carousing and much more.
Much of the money goes to major state-owned tourism draws: the Superdome and its neighboring arena as well as the massive Ernest N. Morial Convention Center beside the Mississippi River. Changing the flow of money would require legislative action. But so far the mayor’s call for a “fair share” for the city has gotten a cool reception from Gov. John Bel Edwards and the president of the state Senate — as well as from one of the top spokesmen for the tourism industry.
“Over time, the city of New Orleans has not put one dollar into the building of the Superdome, the building of the convention center; has not put one dollar into the operations of the Superdome or the Convention Center; has not put one dollar into the average, every-year renewal and refurbishment that has to take place,” said Steve Perry, one tourism booster.
Perry is CEO of the nonprofit New Orleans & Company, which promotes local tourism. He recently unveiled the industry’s answer: a proposal that, rather than cost the industry any of its current revenue stream, would raise the hotel tax another .55 percent in anticipation of another $6.7 million a year to meet infrastructure needs.
Perry said the plan would be to immediately raise $81 million with a bond issue, to be financed with the new revenue stream. He told The Associated Press the money could be used to make some initial repairs to the city’s infrastructure, and to develop a master plan for longer-term infrastructure spending.
“Seed capital,” is what Perry called it.
“Not adequate,” was Cantrell’s response in a news release that followed.
“We’ve had plans from the outset,” said her statement, which later added, “What we need is revenue.”
John Pourciau, the mayor’s chief of staff, said the projected annual bill for the city’s infrastructure needs is estimated at between $80 million and $100 million.
Pourciau stressed that revenue from the 4 percent hotel tax going to the Louisiana Stadium and Exposition District — for the Superdome and adjacent arena — and the 3 percent tax dedicated to the authority that runs the Ernest N. Morial Convention Center are not the only parts of the hotel tax that the administration believes should be up for discussion.
Pourciau said nonhotel levees, such as a food and beverage tax that goes to the convention center, are also being eyed.
“She’s looking at any and all revenue-raising opportunities that are currently directed to hospitality,” Pourciau said.
Cantrell spokesman Beau Tidwell said the proposals have met with “significant enthusiasm” from several legislative partners, but he declined to say who might handle any city recommendations in the coming legislative session.
New Orleans’ economy is so heavily dependent on conventions and tourism and major events, such as Super Bowls, Final Fours and the annual Sugar Bowl that, Perry argues, it would be foolish to divert any money from what is now used to constantly promote tourism while maintaining and upgrading the dome, the arena and the convention center.
“You get more money by organically growing the economy and creating jobs and revenue than by disassembling and trying to take revenue from the only thing that’s providing for us,” Perry has argued.
But Pourciau asserts that the tourism industry is just as dependent on the city.
“If the basic services of the city don’t work, the people aren’t going to come,” he said.
The back-and-forth will likely continue right up until the next legislative session in April.
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