Local officials: Sales tax decline difficult

Sales tax collections have slumped, and continue to decline, and local officials are bracing for possible tough decisions.
Last week, parish Sales and Use Tax Director Jeff LaGrange said there’s no indication from sales tax collections that there is any economic recovery going on in the parish. Conversations LaGrange had with those connected to local industry has confirmed that statistic, he said. Sales tax collections in August are from purchases made in July.
Sales and use tax collections in August totaled $2.82 million, a 6.6 percent drop, from the $3.02 million collected in the same month of 2015. Officials collected $139,768 in August as a result of financial audits, while no money was collected from audits in August 2015.
Franklin Mayor Raymond Harris Jr. said he is “very apprehensive. Wondering if we’ve bottomed out or leveled off, and if things are ever going to come back.”
With West Texas Intermediate at $43.30 Monday, and Brent Crude at $45.95, the energy sector decline has crushed local government budgets. Mayor Harris has kept a tight rein on spending over the years, and has been careful to budget conservatively.
“Part of just being practical, wondering if we need to make any more cuts or changes,” Harris said. “If it stays like it is, what do we need to do to go forward, without going under. Those are the hard questions.”
The mayor and staff will begin budget considerations in October. “I’m going to do a real conservative forecast with those sales taxes, and see where they lead us,” Harris said. “Then I’ll have some decisions to make, how to get to those numbers on the expenditure side. It’s not where we want to be, but there’s not much we can do about it.”
Sheriff Mark Hebert said his department expects collections of about $1.9 million as by June of 2017. “That’s the lowest it’s been since 2008, at $2.5 million,” Hebert said. “Our revenue is property tax and a quarter-cent sales tax, put into play in 1997. Last year I tried to run (on the ballot) a little increase, and we were hammered with a positive ‘no.’ We closed the small jail and reduced our size by about 28 people.”
Hebert said total annual expenditures have been reduced by $1.7 million and “we’re still not making it.” That’s on a $12 million budget that, in 2014, was $14.6 million, before the energy sector crash.
“It keeps going town, the cost of business keeps going up,” Hebert said. “It’s just not a pretty picture. You try to run (the sheriff’s department) as a business, but at the end of the day you’re not paid on your merits or your successes, it’s service.”
He said state legislators need to address Internet sales “that circumvent the tax system. The old plan for providing services depends on the local tax base. Now they come into the local parish, circumvent the system, make money, then how do we survive as a service-providing entity?”
Sheriffs in other parishes are laying off, Hebert said. “In this parish alone, one of them is struggling to get to the end of the month, others have cut benefits and salaries,” he said. “A lot of these law enforcement jobs are not big money jobs coming in, so how do you sustain and keep people here?”
Insurance costs of about $2.5 million across the board have worsened the problem. “We’re living proof that you can put 300,000-plus miles on a car. Our motor pool does it every day. They say you can’t get blood from a turnip, but that’s a lie.”
The St. Mary Parish Law Enforcement Center is a major drain on the sheriff’s budget to the tune of about $3 million. “That’s insurance…close to $1 million a year,” Hebert said. “Salaries. When you house Department of Corrections inmates whether you house one or 200, you have to have the same programs and personnel in place, and they don’t subsidize you to replace the funding.”
DOC pays a certain amount for their prisoners, but it does not come close to covering actual expenses, Hebert said. “They want all these rules and regulations in place,” he said. “Today the state’s closing their facilities because they couldn’t afford to do it in that lower $50 a day thing, but they’re going to give us $23-24 a day. It used to be that if you had an inmate whose medical costs was $2,500 and you’re only making $600 a month, DOC used to take him. Now you have to deal with him. So you’re just going into the hole. What worked when we built this jail does not even come close to what it takes to run a jail today.”
The parish pays $3.50 per inmate per day, which is what it costs to feed an inmate. “There’s no money to be made on a parish prisoner,” Hebert said. “I can have one or 300, I don’t make a penny more. We need to find a way to subsidize the salaries that it takes to run that jail, and run the building.”
The sheriff says there’s little possibility of passing a future sales tax proposal. “People are taxed out,” he said. “People look at government like there’s waste, and if you run for off, you’re part of government. A sheriff’s office is an office in itself, it’s not affiliated with state or local government. We’ve shut so much, if I have to cut programs…I may have to close the big jail and go back to the little jail (on the sixth floor of the courthouse) and I’m still not close to getting in the black.”
Hebert said many large jail facilities in Louisiana are closing for the same reasons.
A return of oil prices would increase revenue, but still not get the department into the financial black ink, Hebert said.
“I can’t shrink anymore,” he said. “If we shrink anymore, I’m going to be a responding agency, not a proactive agency. It takes a certain amount of people to stay efficient.”
One of those is technology that can help solve crimes. “Nothing’s free,” Hebert said. “But you don’t want to go back to the good ol’ days.”
St. Mary Parish Chief Administrative Officer Henry “Bo” LaGrange said the parish has “budgeted very conservatively, and we have been tracking it month-by-month. So far, fortunately, our budget is pretty much on track with what we’ve been collecting.”
LaGrange said there was an over-budget in the half-cent sales tax, which was corrected in a recent budget amendment.
“We had to make some cuts in that fund,” he said.
If revenues continue to decline, more cuts are likely, LaGrange said.
Baldwin Mayor Donna Lewis Lanceslin said the sales tax collection decline has worsened the town’s existing financial woes. There have been fundraisers within the community to raise money to help Baldwin make it through lean times.
There have been cuts in hours for some employees, and Lanceslin says she does not foresee more cuts as of now.