AG reviewing legality of St. Tammany economic development tax

AG reviewing legality of St. Tammany economic development tax

ST. TAMMANY PARISH, LA (WVUE) - St. Tammany Parish residents believe a sales tax is being illegally imposed against them, and Louisiana Attorney General Jeff Landry's office is reviewing the tax's legality.

Since the beginning of the year, anyone making a purchase in the parish's five economic development districts along the I-12 corridor paid an extra three-quarters percent sales tax.
That is on top of the taxes already imposed in the areas, meaning for every $4 spent the parish collected three pennies.

"It's millions of dollars actually. I believe they've gained three or four million dollars on the districts already," Concerned Citizens of St. Tammany's Rick Franzo said. 
The tax is levied at certain areas along the interstate. Some of the Economic Development Districts encompass areas with no development, but others surround popular retail shopping centers such as the Pinnacle at Nord du Lac and River Chase.

The taxes collected are intended to stay within the EDD for upgrades to the location, but the law states it can be used anywhere in the parish, according to an information pamphlet released by the St. Tammany Parish Chamber. The Council will appropriate any funds from these districts and they must approve the allocation of funds for any project the Administration proposes, the group said.

Wednesday, the chamber released a statement through the chairman of the Advocacy & Public Policy Committee Tom Meyer stating,

The members of the St Tammany West Chamber of Commerce Advocacy and Public Policy committee on September 14, 2016 learned of the Parish Councils intent to vote in an Economic Development District sales tax during the October council meeting. Upon learning of the tax proposal the committee requested to go speak before the council at the upcoming council meeting and ask that the council delay voting on the tax. The delay request was due to a lack of information and understanding of the tax by members of the committee, member business owners in the area of the proposed tax and of other St Tammany Parish citizens.

Last year, all but one St. Tammany Parish council member approved the creation of the EDD tax.

"I'm not upset with the parish in the fact that I think that they did something illegal on purpose, but I think we need to find the law whether or not they did," Franzo said. "If they did, it needs to be taken back, and they need to bring it before the people to vote on it."

"If we had needed a vote of the people, we would have done it that way," Parish President Pat Brister said.

Brister said a law firm was contracted to check the EDD's legality and advised her and the council it was above board.

"[EDD's] are never brought to a vote of the people. Economic Development Districts or TIFs...are placed on a piece of property or a shopping center for instance to improve the site that they are on," Brister said.

The St. Tammany Parish Home Rule Charter states "all proposals to renew, levy a new or increase an existing sales and use tax shall be submitted to the voters for approval".

Brister said that does not apply with the EDD's because there are no residential households in the taxed districts.

The parish president said if St. Tammany residents do not agree with the tax they can shop at other locations.

"There are other places they can shop that don't have that. So it's their choice if they want to shop there. So it doesn't have to affect them," Brister said. "People come through this parish from both sides Mississippi and Texas. They stop and spend money too. So those people are taxed too. Do we get them to vote on it also? I think you have to read the law."

Reading and interpreting the law is exactly what St. Tammany District Attorney Warren Montgomery has requested from AG Landry's office.

"The parish charter states that there should not be a sales tax without a vote of the people. So it's a legitimate question. I thought on behalf of the people I'd ask that question and get an answer," Montgomery said. "Given the financial situation of the parish, we ought to know whether we can rely on those funds to finance future activities."

But Brister argued Montgomery is only getting involved because his family members own property in the EDD at River Chase.

She said those family members are against the tax.

"His brother has come to see me on this issue before. So I know how they feel about this issue, and for Mr. Montgomery to say this has no bearing on his request is hard for me to understand," Brister said.

Montgomery denies that claim.

"I have no financial interest in any shopping center, but I do have an interest in making sure that all taxes are imposed lawfully," Montgomery said in a statement.

In an emailed statement, Ruth Wisher with AG Landry's office said the issue "was assigned to an attorney on August 10th."

There is no timetable on when the AG could make an opinion.

The AG's opinion carries no judicial weight, but if Landry does believe the tax was unlawfully imposed, the parish could face legal problems in the future.

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