House Gives O.K. on Incentive Package

The House approved a package of financial incentives Monday night to keep the Saints in New Orleans, lure the NBA's Charlotte Hornets to the city and expand the Ernest N. Morial Convention Center.

The House approved a package of financial incentives Monday night to keep the Saints in New Orleans, lure the National Basketball Association's Charlotte Hornets to the city and expand the Ernest N. Morial Convention Center.

The package, which also holds out the prospect of financing an auto speedway in eastern New Orleans, heads to a Senate committee for consideration today.

Lawmakers are under increasing pressure to complete work on inducements for the Hornets, whose plans to move from Charlotte, N.C., are subject to a vote by NBA officials next week.

Against that backdrop, the House, after painstaking debate covering almost three hours:

-- Approved by a 79-24 vote House Bill 46 by Rep. Edwin Murray, D-New Orleans, rededicating a penny of the hotel-motel tax in New Orleans. The penny now generates about $8 million for local projects. The bill would let about $6 million be spent on commitments that state officials have made to the Saints and Hornets, and $2 million to help finance about $20 million in loans to expand the Convention Center.

If there is any money left over, an amendment by Rep. Kenneth Odinet, D-Arabi, would let it be used to finance planning of the eastern New Orleans raceway. In a previous version of the bill, the surplus from the tax collections would have gone into a fund for New Orleans lawmakers to tap for economic development or educational or tourism programs in their districts. Odinet's amendment makes the speedway another option.

-- Voted 86-18 for House Bill 45 by Rep. John Alario, D-Westwego, to raise the hotel-motel tax in New Orleans from 12 percent to 13 percent and to raise the tax on food and beverages in New Orleans restaurants and bars from 9.5 percent to 9.75 percent.

The bill was amended by Rep. Alex Heaton, D-New Orleans, to exempt "mom-and-pop" restaurants and bars that make less than $500,000 a year and by Rep. Bobby Faucheux, D-LaPlace, to exempt convenience stores and groceries stores that sell food or drinks.

Alario the hotel-motel tax increase would raise about $8 million a year, enough to pay off another $80 million in loans for the $450 million expansion of the Convention Center. The increase in the food and beverage tax would generate about $2 million a year to pay off another $20 million in loans.

-- Approved 69-34 Murray's HB 67 to appropriate a little more than $10 million to complete luxury suites and expand locker rooms and weight rooms at the New Orleans Arena for the Hornets.

The bill also allocates $6.75 million to the Saints as the state's 75 percent share of costs of a new indoor practice center at the football team's headquarters in Metairie. The team would come up with the other 25 percent.

The $16.75 million comes out of the $120 million that the Legislature may spend from tax amnesty receipts.

-- Approved spending $1.75 million in HB 103 by Rep. Jerry Luke LeBlanc, D-Lafayette, to cover the cost of moving the Hornets to New Orleans, if NBA officials approve. The money comes from the tax amnesty program receipts. But the bill requires that a like amount be transferred from the New Orleans hotel-motel tax surplus back into the state general fund.

Bigger increase fizzles.

The longest debate on the House floor came on Alario's bill, with Murray trying to raise the motel tax by 2 percent instead of 1 percent. Murray said a 2 percent increase would generate about $16 million, with $12 million going to the Convention Center to finance $120 million in loans and the rest to the special New Orleans lawmakers' fund for district projects.

At Alario's request, House Speaker Charlie DeWitt, D-Lecompte, ruled that the amendment did not fit the legal parameters of the agenda for the session, and the proposal fizzled.

Alario said the Convention Center expansion "will create 7,200 jobs in the New Orleans area economy and another $54 million in taxes." He said any greater tax increases would jeopardize passage of the bill. Rep. Jack Smith, D-Patterson, criticized Murray's HB 46 for not abolishing the special New Orleans funds entirely.

The bill financing the Saints' indoor training center and the basketball arena improvements picked up allies from outside the New Orleans area, a notable development in a Legislature where New Orleans lawmakers often struggle to persuade colleagues to commit money to their projects. Rep. Vic Stelly, R-Lake Charles, said his city received $37.5 million a few years ago to lure the Boeing Co.

"I haven't forgotten that," he said. "Of the $120 million in tax amnesty money, this is only $18 million that we have spent. The rest we will all share in. It is not all going to New Orleans."


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