A New Orleans tax hike advances; another fails

New Orleans Mayor Mitch Landrieu’s bid to increase his city’s hotel taxes cleared a legislative hurdle Wednesday. However, his effort to charge smokers more per puff hit a roadblock.

Landrieu told the House Committee on Municipal, Parochial and Cultural Affairs that he inherited a city in financial distress. He blamed the distress, in part, on a history of bad management.

“If you want the people of New Orleans to stand on their own two feet — which we’re happy to do ... we need the resources,” he said.

The mayor has a package of bills before legislators. They include:

House Bill 1083 to levy and collect an additional hotel tax of up to 1.75 percent. The tax increase would need City Council and voter approval.

House Bill 1210 to increase the sales tax on cigarettes in New Orleans by 80 cents per pack. Again, the increase would need City Council and voter approval.

House Bill 111 to put a property tax hike for police and fire protection on the November ballot.

HB1083 and HB1210 went before the House Municipal Committee on Wednesday. HB111 already is on the Senate side of the State Capitol.

The committee spent most of its time on the hotel tax increase, which squeaked by on a 7-6 vote despite strong opposition from tourism officials, including Lt. Gov. Jay Dardenne.

HB1210 came up with half an hour left before legislators needed to make their way to the House chamber. It fell two votes short of passage, with six votes for it and seven against it.

Everyone who appeared before the committee agreed that New Orleans faces huge financial challenges. They just disagreed on the solution.

“Are we going to slam the door on the growth of the New Orleans economy?” asked Steve Perry, CEO of the New Orleans Convention and Visitors Bureau, as he opposed the hotel tax increase. “There’s got to be a lot of solutions. This one doesn’t work.”

Last year, a judge ordered the city to pay an extra $17.5 million into the New Orleans Firefighters Pension and Relief Fund. The judge found that Landrieu had shirked his responsibility to adequately finance the fund.

On another front, the city could be forced to pay as much as $22 million to improve conditions at the parish jail. The city’s general fund keeps the jail in operation.

Landrieu also needs to address problems within the city’s Police Department. The mayor wants to add hundreds of police officers.

“I’m just here sending out a clarion call,” the mayor told legislators after briefing them on his budget problems.

Darryl Berger, chairman of the New Orleans Tourism Marketing Corp., compared the mayor’s pitch to choosing between paying the mortgage and buying groceries.

“The solution can’t be on the backs of one industry, particularly one that is your biggest employer,” Berger said.

Dardenne warned legislators against creating tourism reviews that New Orleans is fun and nice but too expensive.

He said New Orleans hotel rooms would become more expensive than rooms in Orlando, Florida, under the mayor’s proposal.

“Louisiana and its brand is in competition with other states. New Orleans is in competition with other cities,” Dardenne said.

Landrieu — who was lieutenant governor before becoming mayor — fired back that it’s hard to understand someone’s position unless you’ve stood in their shoes. He said it’s one thing to advocate for tourism and another thing to be responsible for it.

“Let the people of New Orleans ... make a decision,” the mayor said.

With a few committee members absent, the legislation advanced to the House floor on the 7-6 vote.

The committee then tackled the tobacco tax hike. The bill’s sponsor, Rep. Helena Moreno, D-New Orleans, quickly tacked on an amendment to boost the hike from 75 cents per pack to 80 cents. The extra five cents would go toward health care and economic expenses. The increase would generate $27 million a year.

By the time HB1210 came up for a vote, lunchtime was upon the committee. Two committee members who voted in favor of the previous bill skipped the vote on the tobacco legislation, while two members who had failed to vote on the hotel tax popped up for the tobacco tax vote.

For more coverage of Louisiana government and politics, follow our Politics Blog at blogs.theadvocate.com/politicsblog