Local tourism leaders react to sales tax hike proposal - FOX 8, WVUE, fox8live.com, weather, app, news, saints

Local tourism leaders react to sales tax hike proposal

Tourists stroll along Bourbon Street. Tourists stroll along Bourbon Street.

New Orleans, La. — Visitors are the life blood of the city's economy. Many tourists stay in hotels, eat in restaurants, buy souvenirs and other goods. And given that, tourism leaders are on pins in needles.

"We are extremely worried," said Stephen Perry, president and CEO of the New Orleans Convention and Visitors Bureau.

Governor Bobby Jindal wants to increase the state sales tax as part of his effort to eliminate the state's income and corporate taxes.

"The net result of this would be a loss of jobs, stopping the great trajectory growth that we have right now in tourism," Perry said.

The sales tax for most purchases in the city is 9 percent, including the state's 4 percent sales tax.

As part of a sweeping tax reform package, the governor wants to increase the state sales tax to 5.88 percent.

"We think by doing so we can make Louisiana a better place to raise a family to pay good paying jobs," Jindal said Thursday in talking to news reporters about his overall tax reform package.

"The governor is doing this to promote economic development and economic growth.  It's just that in New Orleans that one piece will actually do the reverse," Perry said Friday.

The impact on the local hotel tax is a big concern for the tourism industry.

"This blended rate that we already have of over 14 and a half percent, that's occupancy taxes and regular hotel tax.  If that was to increase again in a way that did not pour that money back into marketing or advertising or sales to grow that economy, then this would be a net negative impact in the economic development for New Orleans," said Perry.

Perry, who served in former Governor Mike Foster's administration, said CBD staff have discussed their concerns with members of Jindal's staff.  "We can't quite seem to break through on the fact that in New Orleans we have a very high hotel tax already," Perry said.

And Perry said if tourism takes a hit in New Orleans, the state will feel it in its own bank account.  "78,000 people from eight parishes work here in New Orleans in the hospitality industry in this traveler economy, and $222 million in tax revenue is generated just from New Orleans in state and local taxes," said Perry.

"So clearly, when you have an increase in sales tax, you have to look at what damage is done there, and does the positive of the current plan outweigh the negatives of what would happen there," said Greg Rusovich of the New Orleans Business Council.

Jindal insists said the current tax code is unfair, and higher sales taxes are part of the remedy.  "This gives taxpayers more control about when and how they pay their taxes," Jindal said.

"That's not to say that there aren't pieces of the plan that are very intriguing and attractive, but that piece won't work for the city of New Orleans," added Perry.

Perry said the mayor and members of the local legislative delegation are ready to put up a fight at the State Capitol.

Powered by Frankly