Have you heard about the mad scramble in the Legislature following the revelation that the “cleaning of the pennies” of the state sales tax has now resulted in a potential breach of the state’s contract with the Saints and Pelicans?
The last-minute scramble to raise revenues during the recent special legislative session opened the possibility for the Saints and Pelicans to terminate their contract with the state, allowing the two professional teams to leave New Orleans.
The Saints, an NFL franchise, and the Pelicans, an NBA team, weren’t commenting Friday. But Louisiana Revenue Secretary Kimberly L. Robinson said the teams’ owners haven’t raised that threat during the negotiations held over the past few weeks to sort out the mess.
“There’s no indication on their part that they’re looking to exercise any of their rights under the lease,” Robinson said.
In addition to termination, part of those provisions in the 2009 contract include the requirement for the state to reimburse the company owned by the billionaire Benson family for any sales taxes collected by the state in the Mercedes-Benz Superdome and the Smoothie King Center.
The situation is an unintended consequence of that last-minute flurry during the recently concluded special session, whose aim was to fill deficits in this year’s finances and next year’s.
At issue is the interplay between legislation that didn’t get passed with the passage of a bill that temporarily stripped tax exemptions and the state’s contract with the New Orleans Louisiana Saints LLC.
It’s a touchy subject that few want to discuss publicly. Greg Bensel, on behalf of the Saints and Pelicans, refused comment, as did Kyle France, chairman of the Louisiana Stadium and Exposition District, the state agency that oversees the Superdome and other publicly owned facilities.
Doug Thornton, who manages the facilities for SMG, did not respond to a phone message, text and email seeking comment.
With the state facing huge financial problems, lawmakers started looking for exemptions that could be stripped in order to collect taxes.
Aware of the contract provisions, New Orleans Sen. JP Morrell, a Democrat, looked at altering the exemption and collecting sales taxes for nonsporting events, such as concerts. His measure, Senate Bill 22, included wording to ensure the professional football and basketball teams were protected.
Meanwhile, House Bill 61 removed other tax exemptions. Its wording struck the sales tax exemption for domed facilities and professional baseball parks. The two bills were designed in the Senate to work together.
SB22 failed to get a final vote. HB61 became law.
Of course, it’s ridiculous that no sales tax would be collected on Dome Foam or Saints t-shirts or Pelicans hats at the Superdome or Smoothie King Arena. They’ve got the facility to collect it and even wire the sales tax into the price of concessions and merchandise. As we noted over the weekend, the people who are truly being inconvenienced by the “cleaning of the pennies” are folks like the vendors at the Ponchatoula Strawberry festival, or churches trying to do charity bake sales, or high school football teams selling tickets. The Saints are a billion-dollar organization; they can process sales tax at the Superdome.
But naturally, Tom Benson was a lot better negotiator than were the politicians he cut his deals with after Katrina. That he’d bought those politicians with campaign contributions was no small factor in his skill, of course, but he nevertheless managed to get a crony-capitalist break on sales taxes that he never should have.
And in the meantime, a disorganized and sloppy mad rush to gorge on taxes in the special session turns out to have put the state in a position to renege on the deal it cut with Benson – which as it turns out is actually good policy since this part of the deal should never have been made.
Of course they’re going to remedy it forthwith and make sure Mr. Benson isn’t inconvenienced. Even Jay Morris, who sponsored HB61 and has railed against subsidies for the Saints in the past, was running for the hills after it was smoked out just how sloppy his tax increase really was.
New language was added to HB61 with about two hours before the state constitution required the special session to end. Morris still had problems with how the exemptions would apply for the purchase of manufactured machinery, so he focused on that part of the bill and didn’t really look closely at the rest of the new wording.
“To go through that draft item by item would have taken several hours, and we just didn’t have it,” Morris said. “Gosh no, it wasn’t intentional, at least on my part.”
So we’ll have all this stuff worked out in John Bel Edwards’ second tax-raising special session after the current one is over. Mr. Benson and his taxpayer-subsidized football team with its sold-out Superdome will be safe from any negative effects of tax increases.
It’s a bit too late for the vendors at the Strawberry Festival, though. They’ve already been made to cough up to the revenue man.
Speaking of the Saints, the Will Smith murder is an awful story. Just awful.
And I’m wondering if maybe this wasn’t a hit rather than a case of road rage. I’m wondering that because of the comments of the shooter’s lawyer, who alleges that his client was in a hit-and-run accident either with Smith or somebody in his group and had apparently called 911 about it.
All of that seems somewhat practiced to me. I’ve just got a hunch here, I’m not going on any real facts, but this looks like a good way to establish reasonable doubt before you rear-end somebody in your car and then shoot them twice in the back.
Feel free to tell me I’m all wet in the comments if you want. Something about this case doesn’t wash.
Even more lousy news about ex-Saints. Hokie Gajan, who’s been fighting cancer for several months, is now in intensive care. It’s not looking good.
He’s got our prayers. Hokie’s one of our favorite not only Saints, but LSU Tigers. He was never the most talented guy, but nobody had more fight in him than Hokie did.
Here’s hoping he still has that fight and beats that dread disease. We may be hoping against hope, though.
Today’s Last Thing? Well, one way to noodle for catfish is to put out lines. But when these folks outside of St. Martinville did so and went to check to see what they’d caught, there was something unexpected on the hook…