Three Growing Cities. Three Big Budgets. One Big Question.

It is that time of year again — three municipalities in Lafayette Parish recently adopted their annual budgets. So, we decided to dive in. We listened to the budget hearings, we reviewed the budget documents, and we are ready to report our findings to you.

Financial auditors indicate that Broussard, Scott, and Youngsville are doing well. All three are growing. All three are spending heavily on infrastructure. All three have access to dedicated sales taxes, utility revenues, accumulated fund balances, state and federal grants, and various forms of public financing. Their budgets contain millions of dollars in roads, drainage, sewer, utilities, public facilities, and other capital improvements. The picture is one of expansion.

But beneath that picture is a more important question:

How much of what these cities are building today can they afford to sustain tomorrow?

Is it sustainable?

That question becomes particularly important when the source of the money is considered.

Scott proposes roughly $24 million in total capital spending. Broussard‘s capital program approaches $29 million. Youngsville‘s broader capital schedule is also roughly $28 million. In each city, significant portions of that activity are supported by money originating outside the municipality — federal grants, state funds, revolving loan programs, bond proceeds and other forms of intergovernmental funding.

There is nothing inherently wrong with accepting outside money for infrastructure provided there are few strings attached. In fact, local officials would reasonably argue that refusing available funding would simply send those dollars somewhere else.

But even the phrase “outside money” can be misleading. Federal and state grants do not materialize from somewhere beyond the stars. Much of that money was first taken from taxpayers, extracted through taxes and fees, or financed through government borrowing, before being redistributed back to local governments through grants, appropriations and loan programs. The political appropriation process allows local officials to celebrate “bringing the bacon home” without confronting the fact of where that money originated from in the first place  — our pockets.

The Representatives’ Role

That system also changes the role of elected representatives. Rather than being judged primarily by how much government they restrain or how much money they leave in the hands of the people who earned it, legislators are increasingly rewarded for becoming brokers of government money — measured by how many millions of dollars they can secure and return to municipalities in their districts. Local governments, in turn, become increasingly dependent upon maintaining access to that political pipeline.

The result is a peculiar cycle: government removes money from the economy, centralizes control over it, attaches conditions to its return, and then local officials celebrate its arrival as though new wealth has been created from thin air. That does not necessarily make every grant-funded project unwise. But it should change the way taxpayers think about the phrase “free money.” There is no such thing.

Construction Money is NOT Maintenance Money

A grant may build a road, sewer system, park, building, or utility expansion. It does not necessarily pay to maintain it for the next 20 years. It does not necessarily pay the employees required to operate it, the electricity needed to run it, the insurance premiums attached to it, the repairs it will eventually need, or the replacement cost when it reaches the end of its useful life.

That creates a simple but important question for taxpayers: Are these cities using temporary outside money to build a permanent level of government that will eventually have to be financed locally? The budgets do not provide a clear answer.

Sales Tax Revenue

Sales taxes are particularly important because all three cities already rely heavily on dedicated percentage-based taxes.

Broussard anticipates approximately $22.38 million in sales-tax revenue for FY 2027. That includes about $8.95 million from its 1975 one-percent tax, another $8.95 million from its 1992 one-percent tax, and approximately $4.47 million from the 2011 half-cent tax dedicated to parks.

Scott anticipates approximately $13.45 million from the sales-tax sources identified in its budget schedules: roughly $4 million each from its 1968, 1984, and 2023 one-percent taxes, along with approximately $1.45 million associated with the Apollo Economic Development District TIF.

Youngsville anticipates approximately $18.92 million. Its structure is particularly fragmented: approximately $5.41 million from the 1968 one-percent tax, approximately $2.70 million each from the two 1981 half-cent taxes supporting police and the General Fund, another $2.70 million from the 1999 half-cent sewer tax, and approximately $5.41 million from the 2012 one-percent parks tax.

Those numbers provide important context when rising costs are attributed simply to inflation. These cities are not merely paying higher nominal prices; their percentage-based sales taxes are also collecting against those higher nominal prices. Borrowing adds another layer.

Accruing Debt

For FY 2027, the budgets identify approximately $2.72 million in annual debt service for Broussard, $2.12 million for Scott, and $3.00 million for Youngsville. Together, the three municipalities are budgeting roughly $7.84 million in a single year simply to service previously incurred debt.

Broussard’s approximately $2.72 million consists of roughly $1.82 million in principal and $897,000 in interest. Scott budgets approximately $1.61 million in principal and $513,000 in interest. Youngsville carries the largest annual burden of the three at approximately $1.96 million in principal and $1.04 million in interest.

That distinction becomes important when new projects are described as being funded by grants, loans, and other outside sources. Grants generally do not have to be repaid. Loans do. And money committed to debt service is money that cannot be redirected each year toward public safety, road repairs, drainage maintenance, utilities or other current needs.

The issue, therefore, is not merely how much infrastructure these cities can afford to build today. It is how much of tomorrow’s recurring revenue has already been committed to paying for yesterday’s construction.

Digging Deeper

Scott’s FY 2027 budget is particularly dependent on transfers. Its General Fund expects roughly $3.77 million in direct revenue while spending about $10.01 million. Approximately $6.03 million in transfers are needed to bridge most of that gap, yet the General Fund still ends the year with a projected deficit.

Broussard’s situation is different, but the warning sign is equally visible. The City plans to reduce its General Fund balance by approximately $2.03 million and its 1992 Sales Tax Fund balance by another $2.94 million. Together, nearly $5 million in accumulated governmental balances are consumed in a single year. At the same time, Broussard proposes the largest capital program of the three cities at approximately $28.87 million.

Youngsville presents perhaps the clearest example of a recurring operating problem becoming impossible to ignore. Its General Fund is projected to lose approximately $1.36 million, while its 1981 Police Sales Tax Fund is expected to end the year with only about $64,928 — and that is after receiving a $1.95 million transfer from the General Fund. The 1981 Police Sales Tax Fund has struggled to keep up with the demand of funding the police department ever since voters approved reallocating half of the previously dedicated one-cent sales tax to the City generally. That has led to the Police Department budget being supplemented year after year by funds from the City general fund. During the budget hearing, the City’s chief financial officer acknowledged that the current police-funding arrangement was “not sustainable for future years.” That statement deserves attention because it gets directly to the problem.

Dedicated taxes are often created with the expectation that they will fund a particular service for years to come. But government costs rarely remain static. Police salaries increase. Retirement contributions rise. Insurance costs change. Equipment becomes more expensive. Vehicles need replacing. New subdivisions add calls for service. More residents create more demands. Eventually, a revenue source that once seemed sufficient may no longer be enough. Youngsville is confronting that reality now.

The Future of Funding the Youngsville Police Department

Its Police Sales Tax Fund is nearly depleted while the General Fund that has been subsidizing it is rapidly losing reserves. At the same time, Chief J.P. Broussard requested funding for six additional officers, which would cost the City approximately another $500,000 annually (even though retention remains an issue despite a pay raise measure adopted by the City just one year ago). The Council declined to fund any of those positions. The Council’s decision sparked comments within the police administration to ‘blow through it all.’

The Council also acknowledged that its school-resource-officer program is under-reimbursed by roughly $297,000 in direct personnel costs before vehicles, fuel, uniforms, equipment and overhead are even considered. This wasn’t a sudden epiphany; the funding model has been baked into service contracts for years. But it is now the focus because money is getting tight.

Despite this challenge, the Council must be credited for discussing the tough situation. Just about every Council member voiced the need for some form of security at the schools within the City. But they also recognized that school security is not a function of the municipality. It is a function of school administrators. Municipal police agencies are responsible for enforcing the laws and responding to emergency situations. Providing security is a different function that can be addressed through other avenues. Although no one said it bluntly, the reality is that school security is not the Council’s problem to solve. But the budget crisis is.

The question is no longer whether the dedicated police tax is sufficient. City officials have effectively acknowledged that it is not. The question is what comes next. Higher taxes? Additional transfers from the General Fund? Fewer officers than the department says it needs? Reduced spending somewhere else? Those are policy choices that the government will be forced to confront.

Parks and Recreation

Recreation presents another recurring cost that deserves more attention than it usually receives. Many would call it a “money pit.” It is also an area where Scott escapes criticism, because they haven’t tried to replicate the massive parks and recreational models of Broussard or Youngsville.

In Youngsville, the Parks and Recreation Fund projects only about $1.60 million in operating revenue against roughly $6.39 million in operating expenses, producing an operating loss of approximately $4.78 million before dedicated sales-tax support. The gap is covered by approximately $5.41 million in dedicated sales-tax revenue. That does not mean the facilities provide no public value, but it does mean they are nowhere close to supporting themselves through the revenue they generate. The taxpayer subsidy is not incidental to the operation; it is the operation. It also makes it hard to ignore the fundamental question — which is the bigger priority, dedicated funding for public safety or building and operating more parks?

Broussard shows a similar, though smaller, pattern. Its recreation system projects approximately $717,000 in operating revenue against about $3.39 million in operating expenses, a deficit of roughly $2.67 million before dedicated sales-tax support. Approximately $3.67 million in transfers or dedicated sales-tax revenue is then used to support the fund. The issue is not whether parks and recreation should exist. The issue is whether taxpayers fully understand the recurring cost of maintaining these amenities after the ribbon-cuttings are over.

These systems also reinforce the broader infrastructure problem. Parks, sports complexes and recreational facilities are especially easy to build when grants, dedicated taxes or capital funding are available. But once constructed, they create permanent obligations: staffing, utilities, grounds maintenance, repairs, insurance, equipment replacement and future capital rehabilitation. A facility can be called an economic-development asset or a quality-of-life investment, but if its annual operating revenues cover only a fraction of its expenses, the difference must continue to come from somewhere. Over time, that “somewhere” will become the taxpayer.

We’re Not Watering It Down!

Utility rates are moving in the same direction. All three cities are increasing water and sewer charges, although the magnitude varies. Broussard raised residential water rates by about 5% and sewer rates by roughly 10%. Youngsville’s increases are generally around 5% for both water and sewer. Scott’s increases are more pronounced on the consumption side, with residential water usage charges rising about 13.5% and sewer usage charges about 12.5%.

Those increases matter because utility bills function differently from broad-based taxes. Residents cannot easily avoid water and sewer service, and rate increases fall directly on households and businesses already paying sales taxes, property taxes, garbage fees and other municipal charges. In Scott and Broussard, the increases also come while major utility capital programs and borrowing remain underway. The question is not whether these are temporary adjustments to meet current costs or the beginning of a longer rate path needed to support new debt, maintenance and replacement obligations. We already know once increased, they will not likely be reduced.

Blame It On Inflation!

There is another common explanation offered when municipal expenses rise: inflation. Certainly, the purchasing power of money has fallen, and costs have increased. Construction, insurance, equipment, fuel and labor are all more expensive than they were several years ago. But “inflation” should not become an all-purpose explanation for deteriorating municipal finances.

More importantly for local budgets, higher nominal prices do not affect only expenses. Percentage-based taxes automatically respond to higher prices. If an item that once cost $100 rises to $110, a two-percent sales tax rises from $2 to $2.20 without the City Council increasing the tax rate by a single fraction of a percent.

That does not mean every municipal revenue source rises equally. Property taxes, fixed fees, permits and other revenues operate differently. Nor do every city’s expenses rise at the same rate. But it does mean that officials should not cite rising nominal expenses without also discussing rising nominal revenues.

Property Taxes

Sales taxes are particularly important in Broussard, Scott and Youngsville. All three cities rely heavily on them. However, Broussard occupies a unique position because it currently levies no municipal ad valorem tax, preserving a potential recurring revenue source that Scott and Youngsville already tap into.

That unused taxing capacity gives Broussard more flexibility than a simple comparison of current property-tax collections would suggest. Yet flexibility is not the same thing as sustainability. The larger concern running through all three budgets is the tendency for impressive consolidated numbers to obscure weaker operating realities.

Broussard projects approximately $69.5 million in combined ending fund balances and net position. Youngsville reports approximately $88.1 million, and Scott reports approximately $43 million. Scott also reports substantial balances spread among utility, sales-tax and other funds. But those numbers include restricted resources, enterprise net position, capital assets, dedicated taxes and other amounts that cannot simply be treated as cash available to operate City Hall.

The General Funds tell a different story.

Generally Speaking

Broussard is drawing down reserves. Youngsville is drawing down reserves while continuing to subsidize an almost depleted police fund. Scott is heavily dependent on transfers simply to support General Fund operations. That doesn’t mean any of the three cities are on the verge of financial collapse. It means something more subtle.

These cities are growing rapidly, building aggressively and taking advantage of an extraordinary amount of outside funding. At the same time, recurring operating costs are increasing, and some traditional revenue structures are showing strain.

It is easy to forget that the easiest years are the years when someone else is paying the bill. The harder question comes later. When the grants are spent, when the loan payments begin, when the roads need resurfacing, when sewer equipment fails, when police departments need more officers, and when the new infrastructure requires permanent maintenance, will existing local revenues be enough? Or will taxpayers eventually be asked to finish paying for the “boom” brought on by a temporary influx of outside money?

That is the question the FY 2027 budgets of Broussard, Scott and Youngsville leave unanswered.

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