Jeff Landry Nixes $18 Million Grocery Store and More

Last month, we introduced you to one of the stranger stories of the legislative session. An $18 million taxpayer-funded grocery store project run through a nonprofit formed by a convicted fraudster. It had a 76-acre special taxing district attached. And all of this was being directed from an apartment in downtown Baton Rouge, which served as the organization’s official address.

Governor Jeff Landry appears to have shared many of those concerns. He killed both the $18 million subsidy and the special taxing district that would have helped finance the project. Among his vetoes was Senate Bill 283, by Sen. Regina Barrow’s (D-2/10), which attempted to create two new, unaccountable government institutions in East Baton Rouge Parish. One of them, the BLVD at Harding Area “Special [Taxing] District,” was designed around the same North Baton Rouge development promoted as the future home of a taxpayer-funded grocery store.

The governor did not stop there. Using his line-item veto, he also removed an $18 million capital-outlay authorization for the same project — A Good Deed Foundation’s North Baton Rouge Food Access and Community Development project. Public descriptions and local reporting identify that project with the BLVD at Harding development and its proposed HarvestFresh grocery store.

The result is a rare double victory for taxpayers. Landry rejected both the new government created to subsidize the development and the largest state funding package attached to it.

The Grocery Store That Needed Its Own Government

The pitch was familiar. North Baton Rouge needs better access to fresh food. Therefore, taxpayers should help finance a grocery-anchored private development. SB283 went much further than helping a grocery store, though. It would have created the BLVD at Harding Area Special Taxing District as a new political subdivision of the state. The district would have received bonding authority and the power to levy ad valorem, sales, and hotel-occupancy taxes — all without voter input. It could also have created subdistricts and pledged tax collections to other “economic development” projects.

Its board would not have been elected by the people paying the taxes. It would have included the mayor or a designee, five legislative or Metro Council appointees, and qualifying property owners or their representatives. None of these people answer to voters.

The bill also created a second political subdivision, the Baton Rouge Community College Economic Development District. That portion substantially revived the concept contained in SB282, a separate Barrow bill that stalled in the Senate before the BRCC district emerged in SB283’s conference report. If you aren’t familiar, a conference report is supposed to negotiate the difference between the House and Senate-passed versions of the same bill. Increasingly, it’s used to sneak in additional items that were never discussed and for which the public had no opportunity to comment.

The Veto Message

Landry’s veto message went directly to the central problem. He wrote that the BLVD district’s powers could have raised the combined sales-tax rate inside the district to 12.5 percent. Because residential property was effectively excluded, the governor concluded that the districts were structured to all but guarantee taxes could be imposed without voter approval.

His summary was even more pointed: the bill would allow a “largely unelected and unaccountable board” to raise the cost of taxable purchases without the consent of voters. That is exactly right. If elected officials believe a tax is necessary, they should impose it themselves and answer to voters for the result. They should not create a whole new government, stock its board with appointees and empower it to collect the taxes. This is the same battle unfolding all across Louisiana. One such recent taxation without voter consent popped up recently in New Iberia.

The Other Half of the Grocery Store Veto

While the veto of SB283 prevented the new taxing districts from coming into existence, Landry’s line-item veto of House Bill 2 removed the public subsidy from the other direction. On page 143 of the capital-outlay bill, lawmakers authorized $18 million for A Good Deed Foundation’s North Baton Rouge food-access project:

• $1 million in Priority 2 general-obligation bonds;
• $16.2 million in Priority 5 general-obligation bonds; and
• $800,000 from the Capital Outlay Savings Fund.

Landry deleted the entire project.

While most of the $18 million was not a check ready to be deposited the next morning, capital-outlay priorities govern access to future bond financing, and Priority 5 dollars are where projects wait in line for future funding. The Legislature authorized a path to $18 million in taxpayer-backed financing. The governor closed it.

In an ironic turn of events, the developers now say the roughly $50 million project will continue despite the veto. Apparently they didn’t need your tax dollars after all. If a grocery store can succeed in North Baton Rouge, its owners, investors, lenders and customers have every reason to build it. The veto does not prohibit a grocery store. It simply declines to make taxpayers pay for it.

Seventy-Eight More Uses of the Red Pen

The grocery-store project was part of a much broader veto sweep. Landry issued 31 line-item vetoes in HB1, the state’s operating budget; 13 in HB2, the capital-outlay bill; and 34 in HB312, the supplemental appropriations bill. That is 78 separate deletions across the three principal spending measures with a combined face value of approximately $64.3 million, including $47.75 million in capital-outlay borrowing authority.

Reasonable people can find sympathetic purposes in almost any one of these appropriations. That is how pork survives. Each recipient tells a compelling story; each legislator insists his or her project is uniquely important; and the bill arrives at the governor’s desk carrying hundreds of small constituencies for spending somebody else’s money. The real question is whether these are functions of government at all. The veto power exists for precisely that moment.

Stay tuned. We’re still sifting through these other items for a future article.

A Conservative Act, Not Merely a Conservative Slogan

Politicians routinely campaign against waste, unnecessary government, and taxation without representation. Those promises become meaningful only when saying no carries a political cost. Landry used two different constitutional tools here. He vetoed SB283 in full, blocking two new unelected political subdivisions from acquiring taxing and debt authority. He then used the line-item veto to remove dozens of appropriations while allowing the main operating, capital, and supplemental budgets to become law.

The practical result is unmistakable: fewer NGO earmarks, fewer questionable local projects, no $18 million state authorization for the BLVD grocery development, and no BLVD taxing district empowered to collect more money from the people shopping there. For once, taxpayers did not merely hear a speech about limited government. They got to watch a governor limit it.

Whether the grocery store ultimately succeeds or fails should now be determined by customers, lenders, investors and the people risking their own money—not Louisiana taxpayers. That’s how a market economy is supposed to work.

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