Highest sales tax city in LA goes higher still

That’s good timing: West Monroe is raising sales taxes after being identified as the municipality with the highest sales tax rate in Louisiana.

The Tax Foundation’s mid-year report on sales taxation ranks Louisiana only 37^th among the states in state sales taxes, but then throw in the second-highest combined weighed local sales tax rates and it crests at the top of the consolidated rate at 9.565 percent. At any location in the state, consumers could have added to the state rate (which doesn’t apply to food, drugs, and utilities) sales taxes levied by perhaps several different local governments.

In West Monroe, for many parts of the city there is just the Ouachita Parish School District’s three percent and the city’s 2.99 percent. This combined rate is actually lower than a number of places around the state; Sterlington, for example, has a combined rate of 6.50 percent, but the city’s rate is only 2.5 percent as the District’s rate there is a point lower but parish and fire protection levies add a point each.

Pushing the aggregate rate higher is the West Monroe Economic Development District, which taxes hotel, restaurant, and other entertainment venues along certain major roads, tacking on an additional one percent, which then goes to paying off bonded indebtedness. Other municipalities across the state (including, for example, Sterlington) also have special districts within their boundaries that push combined rates even higher than the 11.44 percent in the WMEDD, but in terms of actual tax levied just by a municipality, West Monroe’s is highest.

Maybe so, but Republican Alderman Thom Hamilton pointed out that the city’s property tax rate – only 6.90 mills – is the lowest for a municipality. Again, however, this needs to be taken in context of the overall rate paid by city residents which, considering a number of different governments and purposes, actually is 81.25 mills although below average in the state.

But now West Monroe has decided to create a second EDD, the West Monroe Riverfront Economic Development District. It’s not particularly large, extending only about four blocks along Commerce and Riverfront Streets and exempts non-commercial properties plus doesn’t extend into Antique Alley. It will collect funds for developing the area, much like the WMEDD.

Yet it is a new tax and one less likely borne by tourists, as the claim is made about the WMEDD. Nor will the owners filling the tankards at the likes of Flying Heart appreciate the higher expenses they must pass on to customers, discouraging business and hoping whatever comes out it eventually increases business potential.

For some, high rates aren’t a problem. Democrat Alderman Rodney Welch said sales tax rates have risen across the state to account for inflation, as he apparently stumps for an increase. Of course, this view somehow neglects to consider that as inflation increases and so do prices at the register then sales tax collections rise accordingly without any change of rates. Meanwhile, under a Democrat in the White House and his understudy aiming to replace him, inflation has risen faster than wages, leaving Americans losing ground.

Steep sales taxes don’t attract business. West Monroe’s leaders better think carefully about their tax-and-build strategy.