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Informer: TIF district would levy tax in lieu of state, local tax

Last Modified: Saturday, November 09, 2013 6:54 PM

By Andrew Perzo / American Press

In the Oct. 11 newspaper, an article quoted Mayor Randy Roach as stating that the 9 percent tax to pay for the hotel at the Civic Center would be composed of 4 percent state and 5 percent local, so the 9 percent rate would stay the same as it is now.

However, the 5 percent local tax currently does not all belong to the city of Lake Charles; part goes to the School Board and part goes to the sheriff’s fund. How can the city just appropriate the funds that belong to other jurisdictions and the state?

Under what authority do they plan to take all 9 percent in that area? And what about the extra 4 percent occupancy tax that goes to the tourist bureau?

City Administrator John Cardone said hotel patrons in Lake Charles now pay a 13 percent tax on their rooms — 4 percent in state sales tax, 5 percent in local sales tax and a 4 percent room tax, which goes to the Southwest Louisiana Convention & Visitors Bureau.

The sales tax in the proposed tax incremental finance district would remain the same unless the district added a 1 percent occupancy tax, which would only be collected in the district itself, Cardone said. The visitors bureau would continue to collect its 4 percent tax regardless, he said.

The 9 percent tax mentioned in the Oct. 11 story — the state-local split reference in it wasn’t made by the mayor, incidentally — is authorized under a law passed by the Legislature in 2004, Cardone said.

If voters approve the TIF plan, then the TIF district can levy its 9 percent tax in lieu of the state and local sales taxes now applied to rooms, he said.

The city’s plan is based on the TIF that Baton Rouge used to help pay for its downtown Hilton and to convert the Swaggert Ministries building into a Marriott, Cardone said.

“The implementation of a TIF district allows the city to capture the new tax revenue generated by a hotel in the district and use that money to help pay for the hotel and related improvements,” he said in a statement.

“After the city’s share of the cost of the hotel project is paid, the sheriff and School Board will get their share of the proceeds from the Civic Center hotel revenue.”

Cardone said the law limits how much state sales tax money can be used to cover costs for other public improvements in a TIF district. The amount, he said, is capped “at an amount equal to the local sales taxes actually pledged for that purpose.”

The city doesn’t plan to ask the School Board or sheriff to help with those costs, Cardone said.

“The use of state sales taxes on hotel occupancy to pay for local improvements is not unique. Several cities have used this mechanism to help pay for civic centers and other similar facilities,” he said.

“Locally, state sales taxes on hotel occupancy in Ward 4 are being used to help pay for the West Calcasieu Arena and its current expansion.”

MD address belongs to real holiday effort

The address Holiday Mail for Heroes, P.O. Box 5456, Capitol Heights, MD 20791-5456 — is this a bona fide address for soldiers nto get mail?

It is the address for a holiday greeting card program run by the American Red Cross.

For more information, see Brian Burton and Kay W. Wilkins’ letter on Page B3 on Sunday's American Press.

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The Informer answers questions from readers each Sunday, Monday and Wednesday. It is researched and written by Andrew Perzo, an American Press staff writer. To ask a question, call 494-4098, press 5 and leave voice mail, or email

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