Lafourche Parish spending excess revenue

The Lafourche Parish Government revenue stream continues to impress when compared to 2010 and forecasted 2011 figures through June, which has led to increased spending, but the recent federal fiscal crisis has tempered optimism of maintaining the heightened pace.

With royalty and Road Sales Tax District 2 coming in ahead of budget the first six months of 2011, the parish has increased its spending, restoring slashed funds from recreation districts, dedicating money to repair streets in Golden Meadow and pushing for cost-of-living and merit raises for parish employees.

“We’ve been fortunate [with the economy] through the first seven months,” Parish President Charlotte Randolph said.

Boosted by crude oil trade prices, royalty revenue is up 40 percent against the projected budget through June and 39 percent against 2010 numbers over the same span.

An undedicated revenue source, royalty monies can be spent however the parish sees fit. The latest proposition is an ordinance scheduled for the Aug. 23 council meeting that would grant all unclassified parish employees a 2 percent cost-of-living raise and an additional 2 percent merit hike to employees who scored well on their latest job evaluations.

Parish government, in compiling a conservative budget for the current fiscal year, did not include raises. “We said by mid-year we would revisit it,” Randolph said.

The parish reinstated a combined $122,000 to its various recreation districts, after scaling back their budgets late last year.

Parish Finance Director Ryan Friedlander, who is working on the 2012 parish budget, forecasted implementing a similar strategy to 2011 as it pertains to recreation.

“We’re probably going to do the same thing this year, where the allocations from the parish-wide rec millage will be higher for 2012 budget than 2011, but it won’t be as high as 2010,” Friedlander said. “As the funding is available, then we’ll restore it as we see fit.”

Lafourche also recently authorized spending $20,000 in membership fees to Restore or Retreat, a coastal advocacy organization, $10,000 for architectural fees relating to the redesign of the concession stand and restroom at Heroes Park in Thibodaux, and $9,500 to update its Code of Ordinances.

Sales tax collections have also maintained above-budget totals. Road Sales Tax District 2, which encompasses unincorporated areas south of Valentine, is 14 percent ahead of budget and up 15 percent from last year’s first six months.

The parish council approved appropriating $2.3 million from RSTD2 to fund various road-repair projects in Golden Meadow.

Dist. 9 Councilman Daniel Lorraine said the road repairs scheduled would “finish off my list” of unsatisfactory roads in the tax district.

But the global market reaction to Standard and Poor’s downgrade of the nation’s credit rating has fueled speculation and caused oil prices to plummet. Light, sweet crude oil futures for September were trading at $85.30 per barrel Friday.

Through the first six months of 2011, Lafourche was averaging $420,000 per month in royalty revenues. The finance director said he was already expecting a “dip” in July royalty figures.

“At that pace, you were probably looking at maybe between $4.75 and $5 million [as a yearly total] if everything stayed pretty solid,” Friedlander said. “Now I think you’re looking at a total closer to $3.8 to $4 [million].”

Friedlander couldn’t really speculate on the credit rating down grade’s specific impact on future sales tax collections, but he said it shouldn’t be as substantial as the royalty fund.

“Unless people are going to stop spending money, like going to grocery stores and restaurants and things like that, I think the sales tax will have less of an impact from the credit rating than the royalty will,” the finance director said.