Regional economic development organization opposes incorporation effort

BATON ROUGE, La. (May 15, 2018)  —  The Baton Rouge Area Chamber (BRAC) today announced that its Board of Directors has voted to oppose the formation of a new city in the southeast portion of East Baton Rouge Parish.

For any policies it considers, BRAC evaluates through a frame of impact on economic development, and the region’s and parish’s business climate. During the first St. George incorporation effort, BRAC raised concerns regarding the financial implications for East Baton Rouge Parish, and the likelihood for tax increases in the proposed city, in its area’s proposed school district, and across the city-parish due to revenue reductions. There was also significant concern about the impact on the region’s economic development activities due to negative national perceptions, and concerns about the negative financial effect on the East Baton Rouge school system.

BRAC evaluated the newly proposed city of St. George with an open mind, as the proposal is for a smaller area and differs somewhat from the previous effort. However, BRAC has determined that all of the concerns spurred by the original proposal remain in the 2018 version of St. George, and the BRAC Board of Directors determined that the proposed city’s negatives outweigh any positives.

BRAC’s leaders grasp the frustration that some of the parish’s residents feel toward the education system or the management of the parish’s finances, the issues to which proponents point in arguing for a new city government. However, incorporation was not found by BRAC’s board to be a responsible or effective solution to the problems cited, particularly when the opportunity cost has not been articulated. In assessing the cost, the harm that would be created is a greater concern.

BRAC is also concerned that this effort, which started as one to increase access to high-quality public education, now includes no information or plan about providing public education at all.

BRAC’s position was also informed by these available data points:

  • The proponents’ projected sales tax revenue estimate of $53.4 million alone is overestimated by roughly $20 million, if one compares data from the City Parish Finance Department and the proposed city’s proponents. This 37 percent error calls into question the reliability of the budget plan prepared for the incorporation.
  • The revenue error also calls into question estimates on the expenditure side of the proposed city’s budget and sharpened BRAC’s concerns on the impact to services for both East Baton Rouge Parish and the new city. No similar evaluation of their expenses is available at this time, but news coverage of their methodology points to loose estimates.
  • In the prior incorporation, the agencies of the City Parish that were at greatest risk of financial reductions were determined to be the Police Department of Baton Rouge, the Fire Department, and the Department of Public Works. Although no updated analysis is available on the new proposal, it is expected that the impact analysis to the parish would yield similar results.
  • Additional negotiation with the Parish and Sheriff over expenses, legacy costs, and finances would be necessary in order to follow the model from the City of Central’s incorporation. This negotiation has not occurred.
  • The median household income for EBR parish as a whole is $49,188, while the median household income of the proposed new city would be $88,061, or 79 percent higher.
  • An incorporation of a large section of East Baton Rouge’s unincorporated area would weaken and threaten the combined form of city-parish government. The City Parish form of government provides shared and spread risk across a larger population, which has kept costs lower and provided greater access to services across the parish as a whole. BRAC believes that a change to the City Parish form of government would harm the coordination, leadership, governance, and business climate of the parish.
  • Although the leaders of the effort have not addressed education, the BRAC Board feels it is of paramount importance, given the history of the effort. The newly-drawn boundaries of the proposed city would potentially capture public school facilities with enough capacity to educate only 4,700 students, or nearly 2,000 fewer students than currently live in the boundaries of the proposed city and currently attend public schools.
  • There are currently almost 6,600 children who live in the boundary for the new city of St. George that attend EBR public schools. More than 1,300 students from the proposed city attend public magnet schools outside of the area, and 568 more are in gifted and talented schools. Some 357 students from the area attend Baton Rouge Magnet High School alone. There has been no plan presented to address the displacement of these students from their schools.
  • If property tax rates are maintained at current levels, a school district in the area would garner $36.3 million annually to fund education. This breaks down to $5,538 per pupil currently attending public schools and living in the proposed boundaries. For comparison, EBR Schools provides $7,371 per pupil through current property tax rates. Based on the proposed new city’s relatively higher wealth, it seems unlikely its level of MFP formula dollars would help make up the difference. Again, leaders of the proposed city have yet to disclose how or whether it will seek to provide an equal level of funding, nor have they explained the consequences of lower levels of per-pupil funding on the ability to provide high-quality public education.

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