Thursday, June 20, 2024

Doing the Math: Organization analyzes how Shreveport generates and spends its tax revenue

by BIZ Magazine

“This isn’t complex math I’m doing here — it’s fifth grade division. Don’t overthink this, just do the math.”

Those were the words reiterated throughout the evening as Joe Minicozzi, AICP of Urban3, demonstrated Shreveport’s first-ever comprehensive analysis of how Shreveport generates and spends tax revenue and infrastructure costs on Monday, March 13 at LSU Shreveport campus.

Urban3 has been hired by cities, parishes and towns across the United States and Canada to analyze the financial implications of their development strategies. Most city planners and elected officials understand that a city brings in more tax revenue when people shop and eat out. But they often underestimate just how much more valuable this economic activity is when it happens downtown rather than on a city’s outskirts.

Using local infrastructure and tax data, Minicozzi broke down his comprehensive analysis presentation into parts. Starting with sales tax.

“Your state operates primarily off of sales tax. You’re very similar to Oklahoma, Alabama and Arkansas. The down side of that, you’re going to be paying smaller property taxes. But when you’re running the government off sales taxes, what happens in a recession. You don’t buy the T.V., boat, car. All of a sudden, you can’t afford your city. Cities have a harder time succeeding in that kind of volatility of sales,” Minicozzi said

“You have about 217 million coming into your city in taxes. But you’re spending 253 million,” he added. 

“You don’t look normal when you get into downtown. You’re over 50% non taxable. So that’s not good. You might want to start to have a conversation about this because this is your most fertile soil. This is where your most productivity is. And as you take that land off the tax rolls, surly city hall,” he concluded. 

Minicozzi then went on to discuss parish property taxes.

“As a shareholder in your parish, your city takes up 8% of the land area. And is producing 74% parish property taxes. 20.34,” he said.

“The lesson here is what’s good for the downtown, is great for the city from a production standpoint, but incredible for the parish. Continue to have conversations with your parish about working together and growing your community as well collectively,” he concluded.

Another particular topic Minicozzi really emphasized was all categories of infrastructure in the area. Water, sewer, drainage and roads.

“Breaking it all down inside your infrastructure you got your water, sewer, drainage and roads. Those are your infrastructures that make that land usable. You’re spending about 12 million dollars a year on your water system. You should be spending about 18 million,” Minicozzi said.

“From your sewer system, you’re spending 57 million. You should be spending 61. Not as bad. But it’s still a shortfall. Your drainage system, your spending about 2.7 million. You should be spending about 3.5. Your roads are where the real sticker shock is. You’re spending about 27 million on your roads on an annual basis. You should be spending 110 million,” he added.

“This is a $94 million shortfall, (that) is a lot of money. You just have to own the fact that you all have a lot of roads throughout your community,” he concluded.

Comparing Shreveport to surrounding parishes in Louisiana. Minicozzi says that Shreveport is lacking on what it spends on its roads.

“Comparing you against some sister cities, we were doing work up in Lafayette, Beinville. Roads-feet-per-person in Beinville is actually in worse shape than you are. The length of roads you all have more than them. You’re just not spending enough in the system compared to your peer groups. Beinville is actually doing a lot better on their spending on roads. So you’re spending about 8% on what you should for the roads,” said Minicozzi.

So how did Shreveport fall into this situation? 

Minicozzi says, “One of the reasons why this probably got to this state is that it starts with redlining.”

At the conclusion of his presentation, Minicozzi offered a few tips on how to help grow the Shreveport community, infrastructure and tax revenue.

“You can continue to subsidized or you can continue to find ways to be efficient with your real-estate. You can do any form of development that you want. But you have to set and gear your policies to create that,” he said.

“Concentrate your development, it produces more revenue for you. Your infrastructure is not cheap. People can say anything they want about these roads. You got to pay for them, you got a deficit. You gotta fix that. Cost in revenue very with how you build. Obviously the more you stretch out. Seek efficiencies in your system. Your development patterns matter. Concentration works better. Produces more revenue,” he concluded.

ReForm Shreveport is working to change the way we build our city by breaking down barriers of communication between citizens, business, and government. Through public speaking events, workshops, and neighborhood projects, we can rebuild trust and community to create a more enjoyable, financially-sound, and prosperous city.

— Stacey Tinsley, BIZ. Magazine

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