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Convention Center reserve funds prompt negotiations with Jindal

New Orleans, La. — Local tourism leaders and Governor Bobby Jindal are trying to work out a compromise over millions of dollars in Morial Convention Center reserve funds that the governor wants to tap in to.

With state government still struggling to make ends meet, Jindal said the reserve dollars will help protect higher education from cuts in the next state budget.  But local tourism leaders as well as some elected officials said the funds were generated locally and should remain in the city.

"It's really not appropriate to take this cash to use for a general statewide purpose," said Stephen Perry, president and CEO of the New Orleans Convention and Visitors Bureau.

"What it's about is the state is seizing locally-generated money to patch a hole in the budget," said Senator J.P. Morrell, D-New Orleans.

The Republican governor defends his stance on the funds.

"We think it's important to protect higher education, including universities like Nichols, UNO, SUNO and our other universities including LSU," Jindal said when questioned about the issue by reporters Tuesday.

But locals said, if the money ends up in the state's general fund, there are no guarantees it would go to higher education.

"For anyone to put it in that characterization, that this money's saving higher ed and health care, that's disingenuous because we're not assured this money's doing that," continued Morrell.

Perry said there are misconceptions about the facility's reserve funds.

"Does the Convention Center have the reserves? The answer is yes. Could a hundred million be taken? The answer is no because many of those dollars are already committed to things like their self-insurance deductible," Perry said.

Morrell said the funds are also used for servicing bonds. "That money is not really $100 million sitting around in a piggy bank somewhere. Huge chunks of that money are earmarked for existing costs," he said.

They said the reserve funds come from taxes paid at local restaurants and hotels and are dedicated to advancing tourism efforts in the city.  "To do something that is important to us, which is to expand the convention center, raise tourism and generate more money locally," said Morrell.

Morrell and Perry said losing tens of millions of dollars for the convention center would be no small matter and would set a dangerous precedent that could affect other communities down the line.

"There's a predisposition at the state level that if we can get money at New Orleans' expense it's okay.  What people should be worried about is the precedent this sets," said Morrell.

So the two sides are involved in negotiations.  "To try to find an alternative, but also find a way that maybe we can help them," Perry said of the talks with the state.

"The convention center leaders indicated to us they're interested in some capital outlay, some construction projects, so what we're working with them on is to take $100 million out of those reserves, replace it dollar for dollar with a $100 million capital outlay money so that they would have the money they need for construction," said the governor.

Jindal said it would be a win-win for higher education and the convention center.

"You got $170 million sitting in a reserve account, local leaders want to spend $100 million on construction projects, we've got capacity in our construction budget... we'll give them a hundred million dollars to do those construction projects, and also be able to use that money to protect higher education," he said.

Meanwhile, Perry said ideas coming out of the State Capitol lately are keeping the New Orleans tourism industry on edge. Perry and others say the part of the governor's tax reform plan which would raise sales taxes will hurt tourism and costs local jobs.

"We feel a little bit like there's a bull's-eye on us right now," he said.

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