St. Tammany News

Concerned that the parish's gain may be the city's loss, the Mandeville City Council delayed taking action Thursday on whether or not to freeze the tax rate for property owners.

The decision came after Mayor Eddie Price warned council members that the city was in jeopardy of losing as much as $1.5 million annually in sales tax revenue if a number of Mandeville retailers decide to relocate to the Nord Du Lac shopping center on Louisiana Highway 21 and Interstate 12. Price said he fears that some major retailers, including the Barnes and Noble bookstore and several others in the Premier Shopping Center Two, will be tempted to take advantage of special incentives made possible through an arrangement created by the Parish Council and which will ultimately be paid for by taxpayers as part of a dedicated sales tax increase.

Earlier this year, the parish authorized the formation of the "Colonial Pinnacle Nord du Lac Economic Development District." As part of the process, Nord Du Lac developers are asking the Louisiana State Bond Commission to approve a $20 million Tax Incentive Financing bond, which Price said would allow Nord Du Lac developers to use taxpayer-funded incentives to lure Mandeville retailers to the new shopping center.

Price said retailers at the new location would be able to charge an additional 1.5 percent sales tax, effectively raising the prices on all merchandise at their new locations to repay the bond.

Faced with a potential major dip in sales tax collections, Price said it might be prudent for the council to table any decisions on whether to roll forward the current city property tax millage rate, pending a decision by State Bond Commission in late July on regarding Nord du Lac's request for a TIF bond.

Every four years, the city faces tax revenue reassessment, and during that time the amount of property taxes it is currently collecting from residents becomes the new legal maximum, according to Milton Stiebing, the city's financial director.

The city now collects less property tax than state law permits, because there has not been a need for the additional funding, Stiebing said. However, that could change if Mandeville loses a number of major retailers without any guarantee that the space will be quickly filled by other retailers.

Mandeville's last assessment was in 2004, when the city approved the current 19.2-mill maximum rate. Since that time, rates have been lowered each year and now stand at 17.29 mills.

If the city does decide to collect the additional tax revenues and the Nord du Lac does not succeed in luring the Mandeville businesses, residents would look forward to those rates dropping again after next year's reassessment, Stiebing said. At that time, the four-year cycle would start over.

Even if the increases do go into effect, Stiebing said there will not be a huge increase in property taxes in the city.

People with a home and property valued at $200,000 could expect to pay an additional $38 per year, he said. Those with a home and property valued at $300,000 could expect to pay an additional $57 per year.

City officials are mainly focused on ensuring that the city receives the revenue it needs to keep running efficiently.

Councilmen said they would prefer that revenue come in the form of sales taxes receipts so they can give property owners a small reprieve.

Even with the delay in the decision-making process, Price said the council would have enough time to carefully address the problem and come up with a fair solution after they know more about the city's future financial outlook.