The impact and consequences of the St. George Incorporation


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Wherever you stand, you will not see the St. George incorporation issue in the same way after viewing this.

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  • This presentation has been put together so that we may become more informed as we make decisions about our community. We want to be informed about the impact of incorporating the southeast portion of our parish. The extent and magnitude of the effects of forming a new city are pretty extraordinary. And so before anybody signs a petition or most definitely before any of us vote on this issue, we want to become informed. And not only informed ourselves, but we hope to build our capacity to share this information with others. We believe that contained in this ppt are the facts that we all need to know.
  • What is the cost of the breakaway? Today we will consider…The history of the parish-wide investment in the southeastern portion of our parish.
  • We are her to talk about the proposed new city and the effects it would have on our region, but to fully appreciate what is being proposed and the impact it would have on our community, we need to briefly review our history.Before 1949 there were two layers of government in East Baton Rouge parish. A policy jury that handled all of the parish affairs, and a city government which provided additional services just to those living within the city limits.The police jury always struggled to handle the parish affairs but it especially struggled when the area began to grow rapidly following WWII.So in 1949 the voters approved the consolidation of the city and parish governments. We had a Mayor-President and two overlapping but separate councils: the city council and the parish council.
  • The reasons for consolidation were trifold: to eliminate duplication of government services, to increase governmental efficiency, and to reduce costs. And it has worked so well that it has survived, with few changes, for the past 60+ years, and in fact, it worked so well we further tied our fates together, when in 1982, voters approved the consolidation of the city and parish councils into one Metropolitan Council, which we still have today.
  • As you can imagine the demographics were much different when the Metro Council was created. The unincorporated areas were largely undeveloped, so most of the revenue was generated within the city limits of Baton Rouge. There were complaints, in fact, that too much of the city’s revenue was being spent in the unincorporated areas of the parish.But since we, as a consolidated government, agreed to pool our resources and work together, look what happened.
  • The top 7 included I-10 at Bluebonnet, I-10 at Siegen, Perkins at Bluebonnet.We as a community agreed to develop these areas so the entire parish could benefit. Look at what we’ve done!
  • Within 2 years of passing the Horizon Plan, the plan to build the Mall of Louisiana was announced. Two years later, construction began. A year after that the Mall of Louisiana opened. 1994: Plans to build the Mall of Louisiana are announced. 1996: Construction begins in 1996. 1997: Mall of Louisiana opens.
  • Those areas were developed because we as a community agreed to pool our resources and invest in the infrastructure necessary to attract major retailers. That is something our entire community can take pride in.Script: Now some are proposing to create a new city in the unincorporated area of the southeastern part of the parish. The proponents claim it is not a breakaway.Yes, Virginia, it is a breakaway. If the proposed city is created, it is not simply incorporating an unincorporated area.It is breaking away from the consolidated government established in East Baton Rouge parish in 1949, a consolidated government that allowed us: To eliminate duplication of government services;To increase governmental efficiency;To reduce develop a thriving community.If this city is created the effects on our entire area would be profound.
  • So what is being proposed.It is now being proposed that the unincorporated area, that the whole city parish worked together to build up, become a separate city. There will be 107,000 residents in the new city.Based on a study prepared by Dr. Jim Richardson and his team of economists from the LSU Public Administration Instituteoutlining the potential financial impacts of this new, separate municipality proposed to be incorporated in the southern part of East Baton Rouge Parish
  • We’ve discussed how these major retail centers were developed with significant city-parish infrastructure investments.There’s another fact about these centers.The majority of the sales come from residents who live OUTSIDE the proposed city’s area. That means the majority of the sales tax revenue is coming from residents who live outside of the proposed city as well. We all put in to build up the area; we all spend money there to build up a sales tax base. BUT, if the new city incorporates, the sales tax revenue from these regional commercial centers would no longer go to the city-parish as a whole.That revenue would be redirected to the new city of St. George.
  • So what are the economic consequences of that? The budget is about $282….Now, there will be a smaller population to serve. But even after accounting for "savings" from a smaller population served,
  • By comparison, if we look at Detroit… one year before it declared bankruptcy it experienced a 12.5% deficit in its budget. And we are talking about a 20% deficit.
  • Theproponents of the new city assert that the deficit created by incorporation would be $14 million, not $53 million. That assertion, however, appears to be based not upon any fiscal or legal analysis, but upon the promise of a goodwill gesture to voluntarily remit millions back to the city-parish. Without litigation, there is no legal requirement that this money be given to the city parish. We are being asked to sign a petition and to vote on a matter of this magnitude based on a promise. This promise is being made by private citizens with no official capacity in a not-yet-existent municipality, speaking on behalf of future elected officials who, if the incorporation succeeds,could decide for themselves whether to give that money to another governmental entity. Those elected officials will decide that matter. We are not doubting the sincerity of these private citizens who are making these promises. But they are making promises that they have no authority to keep. And where in the history of our nation have we ever known of this kind of promise being kept?
  • So lets once again consider the original deficit of $53 million. We need to consider the impact of that major of a deficit on the employment centers of our city. Much is made of the wealth of the southeast unincorporated area.That’s true, in terms of RESIDENTIAL wealth.Median income for the City of Baton Rouge is $58,000Median income for the Proposed Municipality would be $89,000BUT the Southeast is NOT the major employment center for our city-parish.110,000 of the jobs in our city-parish, 70% of our workforce, are in the city of Baton Rouge. My husband and I live in the unincorporated area (point to proposed city) but we both work here (point to the city proper)What would be the impact of a 20% reduction in our city parish government funding to our employment center?
  • Well a $53 million deficit would have a major impact on either service cuts or tax increases and probably both.POLICE and FIRE PROTECTION: 40% of the city-parish budgetThe only HAZMAT team for the entire parish is paid out of the city parish budgetThe only Class 1 rated fire department in the regionBRFD Responds to calls outside the city limits
  • So when the city-parish has to raise taxes because of a hole in the budget, everyone in the parish pays for the tax increase, even those of us in a new city.And when there are service cuts because of the deficit in the city-parish budget, everyone feels the effects of those cuts.A $53 million budget deficit would do economic and fiscal harm, to the regional economic engine and to all residents of the parish.
  • And this is particularly risky to the proposed new city because of its almost complete dependence upon sales tax for its government.According to the proponents’ own proposal 80%of new city’s budget will consist of sales tax revenue.
  • Our city-parish budget is already on the high end at about 60%.In comparison, only 33% of New Orleans’ general fund consists of sales tax.Only 22.5% of Austin’s general fund consists of sales tax revenue.Sandy Springs, the city St. George proponents point to as their model? Only 26% of its budget consists of sales tax revenue.Portland: 0 sales tax.Why is relying heavily on sales taxes not considered a “best practice”? Because sales taxes are incredibly volatile.
  • One reason sales taxes are so volatile is because they fluctuate dramatically in response to downturns in the economy. Just last month, the Advocate reported that spending outside the city limits, including at the Mall of Louisiana and the big-box retailers on Siegen Lane, was down 8.3% in November.Sales taxes are also incredibly volatile because retail patterns change continuously. Just take a look at the rise and fall of the shopping malls in the Baton Rouge area. Who remembers shopping at Bon Marche? Cortana Mall? Mall of Louisiana? Juban’s Crossing will open soon. Who will be shopping there instead of in our area?The proponents of this breakaway city rely on $67 million in sales tax revenue to fund their city services, but there is no guarantee the area will continue to generate that much sales tax revenue in the future. They are competing with Livingston Parish, Ascension Parish, and in this day and age, online retailers.And if they create this new city. They will also be competing with the city of Baton Rouge.
  • Click 1: Baton Rouge will inevitably develop its own retail outlets. That’s not to say that development will generate additional sales tax. No, the two cities will simply compete for a share of the existing pool of sales taxes so each government will have a smaller share.As Dr. Richardson noted in his study: “The proposed municipality would create needless competition between cities that today are one community.”Click 2: Right now, if a retail center is developed within the city limits or in the unincorporated area, we all benefit.
  • Incorporating “St. George” is a POLITICAL STRATEGY to attempt to win more votes in the legislature for the breakaway school district. An attempt to gain leverage for their position with the legislature ...
  • The East Baton Rouge Parish School System offers outstanding magnet programs in seven elementary schools, four middle schools and 3 high schools throughout the parish. (Cite number of Southeast children currently attending those schools that would have to leave.)(Are these all A or B graded schools? If so, we should list that.)Belfair Montessori CThe Dufrocq School (Montessori) BForest Heights AThe Dufrocq School BMayfair Laboratory Westdale Heights ABaton Rouge FLAIM ABaton Rouge Center for VPA AMcKinley Middle  AScotlandville Middle CSherwood Middle A*Westdale Middle ABaton Rouge High School AGlen Oaks High School DScotlandville High C
  • If proponents formed new school district, doing so would DECREASE per pupil funding in EBR Schools from $9,635 to $8,870. The largest cut to school funding in BR history.Without raising their own taxes for schools, the proposed city will have its per pupil school expenditure raised. Proposed breakaway area would have per pupil public school expenditure of $11,686.Such a drastic redistribution of funding from a poor, higher minority population to a wealthier, whiter population could bring EBR back into desegregation litigation.
  • So here is a summary of the effects of incorporating a new city and a new school district…..Dissolution of consolidated government…. which would create the need for a new form of the two-tiered government of cities with a overarching parish government.So what is impact of the separation of the southeastern region of our parish to the Southeast Residents?1) new municipal taxes to pay for duplicating the many municipal services that are already served by the city-parish government,2) increased city-parish taxes to make up for the city-parish revenue shortfall.Proponents promise otherwise, but on the basis of NO professional budget analysis. If the city breakaway is successful, then the next step is the school district breakaway. But with or without the city breakaway, if the school district is formed, there will be no access to those magnet schools.And no access to top-notch schools if the school district breakaway is successful with or without the city breakaway.
  • But this is also about our values. How will people see us? What is the national and international image that we want? If you do a google search about this, you will see headlines like these. We are portrayed as secession seekers; a place where whites are against blacks; that the affluent areas want to split from the poor. Is this how we want to be seen across our nation?Look I am not about keeping the status quo. People who know the work that I do know that I believe that we need to make changes; we as a city parish face enormous challenges and obstacles. We have made gains too. All my children went to public schools and received a very good education. But I agree that our public schools are nowhere near where they need to be. Investments in infrastructure are nowhere near where they need to be. We have enormous work before us to defeat the poverty in our community. We have significant challenges to our quality of life. But the way to address these challenges and obstacles is by more deeply working together. Binding our fates to one another and working side by side. NOT by separating our neighborhoods and fighting over the common resources of our community. The sum total of all this research is what we are here for today. To recognize that we work better and are better together. Can I hear an AMEN!
  • What is the cost of the breakaway? Today we will consider…
  • What is the cost of the breakaway? Today we will consider…
  • The impact and consequences of the St. George Incorporation

    1. 1. + The Impact & Consequences of the St. George Incorporation Public Assembly February 4th, 2014
    2. 2. + To be informed about proposed incorporation, we need to understand 4 things: #1) The history of parish-wide investment in southeast EBR #2) The economic impacts of incorporation #3) The impact on taxes and public services #4) The impact on public education
    3. 3. + History of parish-wide investment Before 1949: Two layers of government existed in EBR parish:  a city government provided services for those living within the city proper.  a “police jury” handled parish affairs. 1949 : Voters approve consolidation of city and parish governments:  Mayor-President  Two overlapping but separate councils (City Council & Parish Council) 1982: Voters approve consolidation of city and parish councils into one Metropolitan Council.
    4. 4. + Reasons for Consolidation 1. To eliminate duplication of government services. 2. To increase governmental efficiency. 3. To reduce costs. Key fact Consolidated government brought about increased public services and public investment in the unincorporated areas.
    5. 5. + History of parish-wide investment In 1990, most population & tax revenue was in City of BR: City of Baton Rouge Unincorporated Area Sales & Use Tax: $62,609,350 Sales & Use Tax:$17,622,430 Total Taxes: $84,585,140 Total Taxes: $21,924,510 Investment flowed FROM City of BR TO unincorporated areas. (This aroused significant political opposition.)
    6. 6. + History of parish-wide investment 1992: “Horizon Plan” was adopted by Metro Council.  Kicked off major investments in southeast unincorporated area.  Prioritized 29 areas for economic development. Top projects included: #2 Burbank Dr at Gardere Ln #3 Perkins Rd at Siegen Ln #14 #4 Perkins Rd at Bluebonnet Blvd #5 I-10 at Siegen Ln #6 I-10 at Bluebonnet Blvd #7 Essen Ln at Perkins Rd #12 Coursey Blvd at Jones Creek Rd #14 I-10 at O’Neal Ln #2 #7 #6 #4 #5 #3 #12 ALL in southeast unincorporated area.
    7. 7. + History of parish-wide investment Before and after Project #6: Mall of Louisiana 1989 Developed 1994 – 1997. 2013
    8. 8. + History of parish-wide investment Before and after Project #5: Siegen Lane Marketplace 1989 2013 Developed in 2002.
    9. 9. + History of parish-wide investment Before and after Project #4: Perkins Rowe 2013 1989 Developed in 2008.
    10. 10. + History of parish-wide investment Before and after L’Auberge Casino 1989 2013 Developed in 2012.
    11. 11. Results of parish-wide investment All developed with significant city-parish infrastructure investments
    12. 12. + What’s being proposed? Incorporating a city in the unincorporated southeast of EBR Parish Other unincorporated areas 14,984 residents 13,895 residents 47,370 residents 26,864 residents 107,000 residents 230,058 residents Proposed city Proposed city would have twice the population of Baker, Zachary and Central combined.
    13. 13. Effect on city-parish tax base Commercial outlets were developed with city-parish investment. Majority of their sales come from residents outside proposed city. But if incorporation succeeds, their sales tax revenue would be diverted from EBR cityparish to new city. “Because sales tax revenue is a function of retail location, Baton Rouge residents will subsidize the new municipality.” --Analysis by Richardson, Heidelberg & Llorens, Louisiana State University
    14. 14. + Economic Consequences of Incorporation EBR city-parish budget is about $282 million Proposed breakaway would remove $85 million from EBR city-parish budget … … that’s 30% of entire city-parish budget.
    15. 15. + Economic Consequences of Incorporation Would create an ANNUAL EBR city-parish budget deficit of $53 million or … 20% of its budget Annual deficit in Detroit in 2012 … (year before its declared bankruptcy) 12.5% of its budget
    16. 16. + Fact Check Proponents claim deficit would be $14 million. Claim is not a fiscal or legal assessment. $14 million claim is … • a promise of a goodwill gesture … • to voluntarily transfer $39 million annually from one governmental entity to another … • made by private citizens with no official capacity … • on behalf of future elected officials, who would decide the matter for themselves. (We found no precedent in nation’s history for such a voluntary transfer from one municipality to another.)
    17. 17. + Consequences for EBR Employment Center Southeast EBR is NOT our major employment center. Distribution of Employment in EBR 110,000 jobs (70% of total) Economic engine of the region is located in City of Baton Rouge. Damage to jobs center of EBR city-parish would affect entire metro city-parish.
    18. 18. + Impact on taxes and public services Only two ways to close a $53 million deficit: Tax increases OR Service cuts (20% budget deficit is so large it probably would require both.) Property tax increase to cover a $53 million shortfall = 15 mil increase PARISHWIDE Service cuts would fall heavily on police and fire protection, which make up 40% of city-parish budget.
    19. 19. + Impact on taxes and public services When city-parish taxes are raised, When city-parish services are cut, SOUTHEAST RESIDENTS SOUTHEAST RESIDENTS also pay those tax increases. also receive those cuts. $53 million budget deficit would do economic and fiscal harm that would affect ALL residents.
    20. 20. + A risky venture? The volatility of sales taxes According to the proponents’ proposal, 84% of new city’s budget would consist of sales tax revenue.
    21. 21. Percentage of Sales Tax in Other City Budgets Portland Austin Sandy Springs New Orleans Birmingham Little Rock EBR-BR Proposed City 0% 20% 40% 60% 80% 100%
    22. 22. + Why sales tax revenue is volatile The Advocate, 1/15/15,“EBR spending down in November”: “Spending outside the city limits, which includes the Mall of Louisiana and big-box retailers on Siegen Lane, was down 8.3 percent.” Bon Marche 1960 Cortana Mall 1976 Mall of Louisiana 1997 Juban Crossing ?
    23. 23. + A turf war over taxes? “In essence, the proposed municipality would create needless competition between cities that today are one community.” --Study by Richardson, Heidelberg & Llorens, Louisiana State University
    24. 24. + Where did this idea come from? Proponents tried twice to form breakaway school district. They lost in the legislature in 2012 and 2013. Incorporating “St. George” is a POLITICAL STRATEGY to try to win more votes at the legislature.
    25. 25. + Does the creation of the new city guarantee a new school district? No. Every proposal for breakaway school district requires a return trip to the legislature and the passage of a constitutional amendment (2/3rds vote of legislature).
    26. 26. + If breakaway district does pass … Impact on our schools 7,000 students would be displaced from current schools Displaced Students: 6,996 787 787 students who live in City of BR and attend school in proposed city 6,209 students who live in proposed city and attend school outside 6209
    27. 27. + Who are the displaced students? Students with disabilities attending centers like Southdowns School. Students attending pre-K / K Centers outside the proposed city area. Students attending alternative schools. No Child Left Behind choice students All magnet and gifted and talented students attending school outside the proposed city. (Exception for current BRHS students no longer applies.)
    28. 28. + Impact on our schools Breakaway district would DECREASE per pupil funding in EBR Schools from $9,635 to $8,870: 8% funding cut Largest cut to school funding in BR history. Major redistribution of funds from lower-income, higher minority population to wealthier, whiter population. Likely would bring EBR back into desegregation litigation.
    29. 29. + School capacity issues Public school seats in proposed city  approximately 5,000 Students living in proposed city  10,327 EBR Public School Students  3,497 Catholic school students Southeast residents would face a major, and immediate, school capacity crisis.
    30. 30. + Impact and consequences of St. George incorporation and school district A summary #1) Would create a $53 million deficit in city-parish budget, 20% of total. #2) Would lead either to:  Increased city-parish taxes to cover deficit (which everyone, including southeast residents, would pay), or  Major cuts to public services, especially police & fire protection.  Probably both (due to scale of deficit). #3) Would displace 7,000 students from their current schools. #4) Would create an immediate school capacity crisis in southeast EBR. #5) Likely to require new taxes solely for residents of new city, to fund new municipal government, new school district and school construction. #6) Would likely result in dissolution of consolidated government.
    31. 31. + It’s also a question of our values Recent national and international headlines … “Latest secession seeker: Baton Rouge's richer side" - USA Today “Affluent, white residents of south Baton Rouge propose seceding from city’s poor, black northern areas” – The Raw Story “White, Wealthy South Baton Rouge Wants to Secede From Poor, Black Northern Areas” – The Root “Wealthy white residents of Baton Rouge launch campaign to split from poorer black areas to form their own breakaway city” Daily News (United Kingdom) "Richer White People in Greater Baton Rouge Seek to Secede From Poorer Black Neighbors" - Huffington Post Is this how we want to be seen across our country?
    32. 32. + We have major issues we need to address in our community. But we’ve ALWAYS made more progress when we work together, not when we separate ourselves apart. We are …
    33. 33. + Support Better Together Sign up to get involved at: Donations can be made online or by mail to: Residents Against the Breakaway P. O. Box 3717 Baton Rouge, LA 70821 Checks can be made out to “Residents Against the Breakaway” (a non-profit organization)
    34. 34. + Our Values  We will not question the motives or intentions of those with whom we disagree. We are opposed to the breakaway because of its effects on our community, not because of any motivations behind it.  We will base our positions on facts and evidence, not conjecture or invective. Our community needs more light, not more heat.  We will speak, write and act with respect. We believe citizens of good will can disagree without being disagreeable.
    35. 35. +