Lawmaker proposes redirecting some Convention Center taxes to New Orleans roads

By Jeff Adelson

Source: The Advocate

April 23, 2017

A state representative is proposing to redirect about $16 million a year in taxes from the Ernest N. Morial Convention Center to an independent board that would spend the money on fixing streets in New Orleans.

The proposal, by state Rep. Stephanie Hilferty, would take the revenue from two existing taxes away from the center. The taxes, a 1 percent tax on hotel rooms and a quarter-cent sales tax on food and drinks sold citywide, were put in place by the Legislature in 2002 to fund an expansion of the Convention Center that has not taken place.

“I understand that tourism is one of the backbones of our economy, but our city can’t crumble around our tourism district,” said Hilferty, a Republican whose district includes Lakeview and parts of Metairie.

The proposal has, predictably, generated pushback from the Convention Center and the New Orleans Metropolitan Convention and Visitors Bureau.

“That kind of bill is very nearsighted,” said Bob Johnson, the center’s general manager. “The Convention Center is much more than a meeting space. It’s an economic development driver, and that’s recognized around the world — that these types of facilities are uniquely positioned for economic development.”

Hilferty’s proposal could reignite debate over the funding of the Convention Center, a state-created entity that has its own revenue stream through taxes and fees on hotel rooms and food and drink. It brings in about $60 million a year from those sources and has socked away about $240 million in reserves, largely as a result of the taxes Hilferty is seeking to redirect.

Under a pair of bills Hilferty filed this year, House bills 622 and 623, the money from those taxes — which are collected citywide — would instead be sent to a newly created New Orleans Street Maintenance District, which would be directed to use the money on road repairs citywide.

That would more than double the amount of money available for the city’s street maintenance program, something Hilferty said is necessary to ensure the roadwork being done over the next decade with $2.4 billion from a Federal Emergency Management Agency settlement does not again fall into disrepair.

“The money that’s coming from the FEMA settlement will put us in the right direction. If the maintenance piece is not there, it’s like buying a brand new sports car and never changing the oil,” Hilferty said.

The money would be overseen by a nine-member board including representatives from each City Council district, to be be appointed by the state lawmakers from those districts, plus representatives of the city’s Department of Public Works, the Sewerage & Water Board, the Regional Planning Commission and Louisiana Associated General Contractors.

City officials said they’re still considering the legislation and do not yet have a position on it.

The debate over the Convention Center’s funding has been going on for years, with critics — including the nonpartisan Bureau of Governmental Research — questioning whether some of the tax money dedicated to it could be better spent on roads, public safety or other priorities.

The two taxes in Hilferty’s bill were originally intended to go toward the Phase IV expansion of the Convention Center, though that project was abandoned after Hurricane Katrina. But Johnson and other tourism officials point to other efforts that are in the works, including a proposed $1.5 billion hotel, retail and entertainment complex on land the center owns, though that project appears to be stalled.

Tourism officials say the Convention Center is a crucial driver of the city’s economy.

Stephen Perry, president and CEO of the Convention and Visitors Bureau, said Hilferty’s proposal is “well-intentioned but way off the mark and contrary to Republican economic growth principles.”

He said hotel and food and beverage taxes should not go to unrelated purposes, such as roads, and that taking money from the Convention Center would harm the city in the long run.

“By investing tourism taxes proposed by (the tourism industry) and levied on ourselves, we will grow the economy, create thousands of new jobs and generate more tax revenues than would be taken in the proposed redirection toward roads,” Perry said. “In the long run, the Hilferty bill would lower dollars available for roads, crime fighting and public safety, and sanitation and garbage collection.”

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