Baton Rouge council approves intergovernmental and tax-collection agreements with Saint George after hours of debate

The Metropolitan Council of the City of Baton Rouge and Parish of East Baton Rouge on April 23 approved an intergovernmental services agreement with the newly incorporated City of Saint George and a separate sales- and use-tax collection agreement, clearing immediate steps to avoid disruption of public services while members continued to debate unresolved financial and liability issues.

The actions approved by the council allow the mayor-president of the consolidated government to enter into an intergovernmental agreement with the City of Saint George to provide uninterrupted governmental services during Saint George’s transition to a fully functioning municipal government, and a separate collection agreement for the collection and distribution of sales and use taxes to Saint George.

Council debate focused on four unresolved components that several members said were not included in the documents before the council: an incorporation effective date, language releasing the parish from liability for alleged owed funds dating to 2019, a sewer-collection agreement, and a tax-collection agreement. Councilman Dunn Junior said the draft “does not identify a incorporation date” and noted the sewer and tax collection agreements were not included in the item as presented. Several members pressed administration representatives for those elements before voting.

Dustin Yates, mayor of the City of Saint George, told the council, “this isn't just about an agreement. It's about building relationship moving forward,” and said Saint George intends to be “a great partner in East Baton Rouge Parish.”

Administration officials and legal advisers said portions of those outstanding matters remain under negotiation. Angie (Finance Director) told the council there is a state statute designating a single sales-tax collector for each parish and that the parish finance department has been designated as that collector; she explained the tax authorized by Saint George began being collected on April 1 and that collections would be remitted to the City Parish in May with distributions to taxing jurisdictions in June. She said the parish retains a collection fee, currently 0.8 percent, to offset collection costs. The administration also told council members the sewer agreement was not finalized and that a working draft had been returned to Saint George the afternoon of April 23.

Several council members urged a cautious approach. Councilman Dunn Junior said he would support the item only if the missing components “was a part of it as was shared with me and discussed with me by the administration.” Councilwoman Harris and others pressed administration staff about why the three documents that had been discussed previously did not all appear in tonight’s agenda. The administration responded that two documents had been finalized in time for the agenda and the sewer agreement was still being edited.

Councilwoman Rocca read excerpts of a prior trial record and judicial findings, citing figures used in earlier litigation that she said illustrate the potential fiscal impact of incorporation. Rocca said experts in the 19th JDC trial testified that a 2 percent sales tax could yield approximately $48 million to an incorporator and described related pension and OPEB liabilities raised in the record. She urged the council to consider parish-wide impacts while also seeking a seamless transition of services.

Council members debated two competing motions: a substitute motion to defer the item to the council’s first May meeting and the original motion to approve the agreements. The substitute motion to defer failed on a machine vote; the original motion to approve the intergovernmental agreement then passed on a separate machine vote. The council then approved the related collection agreement by voice vote.

The approvals do not resolve longer-term disputes. Legal advisers and members said claims over tax revenue dating back to 2019 and the incorporation effective date would likely require further negotiation, third-party review or litigation. Legal counsel Brett said the agreement voted on “takes care of the money situation from April of 2024 through June 30 of this year and after that, when the tax becomes effective,” but that other claims going back to 2019 remain unresolved.

The council’s action moves forward a narrowly scoped set of agreements intended to prevent an interruption of services and to establish collection and distribution mechanics for Saint George’s sales tax. Council members and administration repeatedly suggested third-party analysis or mediation would be needed to settle the more complex historical claims and liability questions.

Votes at a glance: The substitute motion to defer the intergovernmental agreement failed on a council machine vote. The original motion to approve the intergovernmental agreement passed on a subsequent machine vote. The separate collection agreement authorizing the finance director to execute a tax-collection agreement with the City of Saint George passed by the council vote recorded as “motion carries.”