Capital Area Transit System attorneys argued in state court Monday that a lawsuit attempting to invalidate the recently passed bus tax should be dismissed because it was filed after a deadline set in state law for challenging votes on tax measures.
In April, residents in the city limits of Baker and Baton Rouge approved a 10.6-mill property tax to expand and improve the bus service.
The cash-strapped CATS was running out of money and faced a possible shutdown this year unless it secured a new source of revenue.
The tax was also on the ballot in Zachary, where it failed.
In July, businessman Milton Graugnard, a Cajun Industries executive, filed a suit alleging the CATS tax is unconstitutional. A second petitioner, William L. Smith Jr., has since signed on as a plaintiff.
The crux of the plaintiffs’ argument is that the tax was levied within the city limits, yet some areas outside of the city limits, such as the Mall of Louisiana and Perkins Rowe, still will receive service.
District court judge Todd Hernandez said he expects to issue a ruling within 10 days.
CATS attorneys Glenn Marcel and Creighton Abadie argued that, under state law, opponents have only 60 days to challenge an election once the results have been promulgated, or officially declared. The suit was filed on May 18 — 70 days after the tax election results were promulgated, the CATS attorneys argued.
“They missed their chance,” Marcel said.
Attorney Kyle Keegan, representing Graugnard and Smith, said the 60-day provision doesn’t apply to their case because a state law cannot “limit the rights that a plaintiff has in a federal claim.” The plaintiffs have asserted that the tax election violated their equal protection rights under both state and federal law.
Keegan also said the 60-day provision is intended for tax elections that involve issuing bonds for public financing, which CATS will not be doing.
“There’s no urgency to get finality as to that tax election,” Keegan said. “There are no bonds being marketed to the public that investors would not want to buy until the validity of the election had been established.”
Marcel said ignoring the 60-day provision would “stumble the applecart all over Louisiana” and could lead to challenges years after voters have approved a tax in an election.
Abadie took issue with the argument by plaintiffs’ attorneys that the boundaries of the tax elections were arbitrarily chosen based on “political expedience.”
He said CATS has authority under state law to levy either parishwide taxes or municipal taxes.
Central voters did not vote on the tax because Central has never received CATS service, and their city officials said they do not want it, Abadie said.
He said 84 percent of CATS’ service miles are within the city limits of Baton Rouge and Baker.
“Of course CATS is going to do a citywide tax where 84 percent of their service is,” Abadie said.
Keegan countered that the tax should cover 100 percent of where the service is.
“That’s what this case is about,” Keegan said. “Whether the people who live outside the city should have to pay for the parishwide transportation they’re getting.”
Keegan said CATS considered going to the state Legislature to draw a taxing district that would have enveloped its full service area, but opted against it because CATS “wanted the money quicker.”
Abadie said CATS officials never considered pursuing a taxing district and distanced the agency from a Blue Ribbon Commission put together last year by Mayor-President Kip Holden. The commission made recommendations about how to improve CATS’ service, one of which was to go to the Legislature to create a taxing district around the service area and levy sales and property taxes.
“There were groups out there … that CATS didn’t even sit on, put together by the mayor, who had all kinds of ideas about transportation, but CATS was not a party to it,” Abadie said.
Abadie called CATS Chief Financial Officer Gary Owens as a witness, who testified that the tax was expected to generate about $15.3 million next year out of what is expected to be a $25 million budget.
The rest of CATS’ budget is made up mostly of federal and state funds and fares.
Many of the federal and state funds pay for specific routes outside the city limits, Owens said.
He also said CATS could theoretically afford to use all of the new tax money within the city limits, and have enough state funds to double service outside the city limits.