(Citizens for a New Louisiana) — There are two ways to raise taxes. The first is the traditional way. A legislator introduces a tax bill. It receives committee hearings. Members debate it. They cast their votes. Then they return home and explain those votes to the people who elected them.

Sen. Stewart Cathey (R-5/10) appears to have found another way. Rather than asking the Legislature to approve future university taxing districts one by one, Cathey’s Senate Bill 374 creates a permanent statewide framework allowing any Louisiana college or university to create its own taxing district. Once created, those districts become political subdivisions of the state with authority to incur debt, issue bonds, levy taxes and special assessments, exercise tax-increment financing powers, and even layer multiple, additional subdistricts possessing those same powers.

Keep in mind that colleges and universities are already political subdivisions of the State of Louisiana. This change simply allows the existing government to add yet another, even less accountable layer of government for taxpayers to try to keep track of. Good luck with that.

Cathey repeatedly described SB374 as a “permissive framework.” In committee, he said the proposal would provide a “creative way to try to find some additional dollars“ for higher education so universities would not have to return to the Legislature “to beg us.” That may be the most candid explanation of the bill offered during the entire legislative process. Where do these “additional dollars” come from? Why, from your wallet, of course!

This bill also reveals the central policy choice. Instead of requiring legislators to debate and vote individually when a university wants to create another layer of taxes that the public will have to pay, they’ve given unelected college bureaucrats carte blanche to levy endless new taxes.

“We’re Not Creating Any New Taxing Authority”

The House debate is where things become especially interesting. Rep. Danny McCormick (R-10/10) asked the obvious question: Why should the Legislature stop reviewing these districts individually? Why create more taxing districts at all? Those questions were met with assurances that the bill was really about allowing universities to retain existing tax increments for infrastructure. House floor sponsor Rep. Paul Sawyer (R-4/10) went even further, repeatedly assuring members: “We’re not creating any new taxing authority.”

However, the enacted law tells a much different story. Act 499 does not merely authorize tax-increment financing. It also establishes a procedure under which district and subdistrict boards may levy taxes and assessments with zero legislative oversight or voter approval. Those powers add to any existing tax-increment provisions rather than replacing them.

Those are two different concepts. One redirects a portion of existing tax growth. The other authorizes levying new taxes. That distinction was largely absent from the floor debate. Sawyer went on to assure lawmakers the bill would not raise taxes on small businesses. But Act 499 expressly authorizes the creation of new district taxes that any small business operating inside one of those districts would be required to collect.

More Government = More Taxes

Perhaps the most significant change is not taxation itself. It is governance. Once a district is created, it is largely controlled by a single university bureaucrat. The institution’s highest executive officer serves as chairman and appoints four additional rubber-stamp members of his own choosing. While one legislator technically serves on the board, his attendance isn’t required. Further, the position is jointly appointed by the Speaker of the House and Senate President. The enacted law does not even guarantee that the legislative representative be the same one who represents the university or the surrounding area.

Cathey acknowledged as much during Senate debate when he explained that universities would no longer need to return with “essentially 13 separate bills.” Danny McCormick’s question rings again: Why create more taxing districts at all? Certainly, it’s not to lower your taxes.

The Election That Will Never Happen

Supporters of this tax increase scheme will be quick to point out that the act ordinarily requires voter approval before taxes or assessments are imposed. However, if you watch this interaction between Senators Rick Edmonds and Stewart Cathey, you’ll see Cathey answering wryly with a vague “yes” when questioned about protecting voters. That’s “it’s not my fault” bill language that requires a vote of the people while conveniently leaving off a very important caveat: if there are no qualified voters within the district or subdistrict, no vote is required! Edmonds should have caught this. His question went directly to voter protection, but the egregious exception to that protection went completely unexplored. Can you imagine any scenario where an unelected bureaucrat would voluntarily structure one of these districts so that voter approval becomes necessary?

If all that sounds hypothetical, it simply isn’t. The no-vote scenario is exactly what happened with the only three districts we’re currently aware of: UL Lafayette, LSU, and Southern. In the last ten years, this is the model that unelected bureaucrats everywhere have embraced to build ever-increasing pipelines out of your wallet. It contains the plausible deniability language that exists for no other reason than to escape direct accountability for causing more layers of ever-increasing taxes.

The Questions That Remain

Speaking of plausible deniability, the bill does “require” a ceremonial approval from the appropriate parish or municipal governing authority. However, if East Baton Rouge Metro Council is any example, the other councils will repeat the same excuses:

• “The legislature authorized this.”
• “We’re just a ceremonial approval.”
• “My vote doesn’t [directly] raise your taxes.”
• “There are no voters in the district anyway.”

Excuses aside, the Legislature did deliberately write it into the statute this way. That matters because the taxes these districts create are engineered to spread all direct blame through multiple, complex layers of unaccountability.

The legislative debates answered surprisingly few of the questions raised by the bill.

• Can subdistricts be created without another vote of the governing authority that created the parent district?
• Must every future debt issuance return to local government for approval?
• How will legislative leaders choose the lone legislative representative on each board?
• Will university districts routinely rely on the no-elector procedure rather than elections?

Those questions deserve answers before Louisiana begins creating dozens of brand new taxing districts.

One thing we do know, however, is the act expressly says a district or subdistrict sales and use tax may exceed the cap in Article VI, Section 29(A) of the Louisiana Constitution. It does not itself establish a numerical ceiling beyond that. Could layering taxing districts and subdistricts raise taxes to 15%, 20%, or is it as high as these bureaucrats can imagine? When it comes to taxation, bureaucrats’ imaginations are known to be quite imaginative.

For all the assurances surrounding SB374, one senator ultimately refused to go along. Sen. Blake Miguez (R-10/10) was the only member of the Louisiana Senate to vote against the bill on final passage, when the vote was 36–1. After the House amended it and sent it back, Miguez stood alone again, casting the Senate’s only vote against concurrence.

A Governing Philosophy

Legislators eventually reveal more through legislation than through campaign literature. SB374 reveals a governing philosophy. When Stewart Cathey was presented with a problem, he did not ask why universities keep running out of money in spite of exponential increases in student attendance costs.

The examples are not difficult to find. After years of declining enrollment, UNO acknowledged that it needed to cut its approximately $100 million operating budget by 15 percent simply to align expenses with expected revenue. Its athletic department separately spent $8.8 million against $4.2 million in revenue during fiscal year 2024 (page 12).

Similarly, UL Lafayette later disclosed an even larger $50 million hole—half a recurring structural deficit and half unpaid obligations carried forward from prior years. During the preceding decade, UL added 267 positions and roughly $40 million in annual personnel costs even as full-time undergraduate enrollment fell by about 1,700 students. Its athletics program subsequently reported $46 million in annual expenses while generating less than $16 million on its own. When these institutions spend beyond their means, students lose programs and employees lose jobs; when the cuts are no longer sufficient, taxpayers are expected to fill the hole.

A Solution in Search of a Problem?

This is right where Cathey’s Senate Bill 374 comes in. Instead of doing the hard work of instituting fiscally sound policies or reining in Louisiana’s sprawling university spending problem, he created a permanent statewide framework that empowers university bureaucrats with yet another revenue stream to tap. Now, thanks to Stewart Cathey’s bill, universities have the power to levy their very own new taxes without the Legislature or the voters!

Their constant increases in tuition and fees are a clear indicator of how this will go—more money for them, and less for students and taxpayers. That may be the most remarkable feature of Stewart Cathey’s bureaucratic tax machine. Legislators who want to raise taxes the old-fashioned way have to keep voting for them. Under Act 499, they just “set up a process” and the taxes raise themselves!

Stewart Cathey didn’t create another “economic development” tool. His bill permanently changed who gets to exercise Louisiana’s taxing powers — and it’s not the voters.