What is to Shreveport Mayor Keith Hightower to have removed from Shreveport taxpayers another few hundred thousand dollars a year? Even though it has been debated for months, now that it appears a contract to build the convention center hotel will be signed soon (which will come in millions above the predicted price or will reduce size of quality, either of which ultimately will reduce revenues), the question of whether the property will have to pay property taxes has come to the forefront.
The answer from the start has been it is taxable. That was the assumption within the only study made which assessed the economic viability of the project – a study that showed the hotel would operate at a big loss whose results Hightower unilaterally changed without the authors’ permission.
Sensibly, Caddo Assessor Charles Hennington has asked for a legal opinion on the matter. Ultimately, the question turns on government’s role concerning “economic development.” A public building used for a governmental purpose apparently qualifies.
But if government is supposed create the conditions for economic development, not actually perform economic development, then the designation of this hotel as nontaxable is questionable. In fact, the Louisiana Constitution grants a home rule entity such a Shreveport the opportunity to do anything not denied by the state.
However, while Shreveport’s charter claims to possess powers not specifically listed in it, none of the charter powers in Article 2 listed for the city permit direct “economic development” by the city. So the question is whether a public building leased to a private entity that competes with other private entities constitutes an attempt to create economic development that is approved by a general, unspecified charter power by Shreveport.
Common sense would imply a negative answer to this question. By contrast, we can review the example used by Hightower to argue for the tax exemption, that being the Cypress Bend Golf Resort which was granted such an exemption. Yet surely Hightower can see the difference between the hotel and this. The resort complex is 12 miles from Many with no hotel or (especially) golf course within miles. The convention center hotel will have half a dozen hotels within a half-dozen blocks. There’s no competition in Sabine for locations around Toledo Bend, a state park, whereas Hightower is asking to place a competitor institution slightly closer than others to something that is a municipal concern.
Or, to restate the question, do we give government a tax break when it tries to create conditions for economic development to be taken advantage of by the private sector, as opposed to when it emulates and competes with the private sector to directly attempt to generate economic development, given that the tax break gives it an advantage over the private sector?
Still, the question about whether this property will be taxable pales to the reaction of Hightower about the whole affair: “We won't have to tap into the budget, but it certainly would cut into the bottom line operating profit,” he said. This shows that Hightower lives in a fantasy world concerning the project. The Tech study showed there would be an operating profit only if one could justify taking out the property taxes; there is probably no “profit” if property taxes are assessed. Simply, Hightower doesn’t care about whether this project is good for Shreveport, he just wants to get it going because he can muscle it through. The larger question is, of course, why he would want to put taxpayers on the hook?
No comments:
Post a Comment