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|Incentives package financing remains uncertain|
Within the next couple of weeks, Ouachita Parish officials could hammer out the details on how they will finance an incentives package that helped lure V-Vehicle to the former Guide plant.
V-Vehicle officially announced last month it would take over the former Guide plant in eastern Ouachita Parish, creating 1,400 new, direct jobs and 1,800 indirect jobs. V-Vehicle says it will manufacture fuel efficient automobiles at the former Guide facility, which is located off Interstate 20 in eastern Ouachita.
The cities of Monroe and West Monroe along with the Ouachita Parish Police Jury pledged up to $15 million as part of the incentives package.
Besides the $15 million in local incentives, the state agreed to provide some $70 million-$100 million in incentives for V-Vehicle.
Police Jury president Shane Smiley told The Ouachita Citizen Tuesday he and Monroe Mayor Jamie Mayo and West Monroe Mayor Dave Norris have been in constant discussion regarding the local financial obligation.
Mayo hinted several weeks ago local officials could have a plan ready by late last week, but Smiley said it has taken longer than anticipated to hammer out a plan to pay for the $15 million in incentives local entities are obligated to provide.
"We're working on something to meet our obligation, so within the next week or two we should have something down," Smiley said. "We're still working out the details of what we're going to do and how it's going to be done."
Speculation surfaced as V-Vehicle announced its plans to locate in Ouachita that local governments would ask voters to approve a 10-year, two-mill or three-mill property tax to pay for its incentives package. At least one economic development official said a property was an option.
Smiley said local officials want to place something on the Oct. 17 ballot for voters to decide.
In order for an item to be placed on the Oct. 17 ballot, Smiley said local officials would need to have everything in order by July 20.
"We're on a tight schedule, but if we don't get it on the Oct. 17 ballot, then we could possibly call a special election," he said.
Byrd Minter of Monroe called on local governing bodies to be more open with discussion about how they plan to finance their portion of the incentive package.
Minter spoke to the Ouachita Parish Police Jury Monday during its regular meeting.
"I want to be the first, I guess, to start a public discussion on our needs of the money that you (police jury) and the two city governments have obligated the taxpayers for," Minter said. "I want to remind you that you all have done this without first asking the taxpayers' approval on where you are going to get the money, unless you have it in your pocket."
Minter believes a property tax to finance local government's portion of an incentives package was the wrong route to take. He suggested local officials look at a sales tax instead of a property tax.
Regarding the property tax, Minter said it basically means "borrowing money and obligating future property taxpayers for it. And, I want to remind you that 75 percent to 80 percent of those participating in the homeowners exemption do not pay anything. So, the burden really falls on the businesses."
Minter knows most people will say local sales taxes are already high and maxed out at roughly 10 percent in the parish.
Yet, he believes a sales tax would be the quickest way to raise money and save taxpayers more in the long run.
Minter believes a one-cent sales tax parish-wide could raise the $15 million needed within six months. He said a ½-cent sales tax could raise the money needed within one year.
"I say let's bite the bullet and eat it for six months or a year, and then get on with the show, instead of obligating people on down the road for 10 or 15 years," Minter said.
According to police juror Walt Caldwell, a study released one year ago by the Small Business and Entrepreneurship Council found that Louisiana ranked 13th in the country for lowest property taxes. However, it ranked 51st, behind the District of Columbia, in sales tax structure.
"What would I say to somebody who would point out these figures, and say why are we going to do another sales tax, which is an area we've already identified as a problem?" Caldwell said.
Minter said either way it would be the taxpayers' responsibility, and he urged local governments to consider the sales tax option, which he believes to be the quickest and cheaper method to fund the $15 million.
Smiley believes Minter has "done his homework to try to come up with a realistic alternative."
Yet, there are two important hurdles regarding a sales tax, Smiley said.
First, local officials would have to convince the Legislature to call a special session simply to give Ouachita Parish the authority to place a 1-cent sales tax measure on the ballot for voters to decide.
Another problem with the sales tax pitch, according to Smiley, is there are probably just as many people opposed to increasing the sales tax as there are those opposed to another property tax.