The Louisiana Legislative Auditor has estimated the impact on Louisiana local government revenues from sales taxes, ad valorem taxes, severance taxes, and mineral royalties due to social distancing and falling energy prices stemming from COVID-19. This work was performed to enable federal, state, and local officials to anticipate budget adjustments that local governments will need to make and to develop plans to balance local budgets by spending cuts, tax increases, loans, and disaster grants.
It’s estimated that parish governing authorities, municipalities, school boards, and sheriffs will collectively experience revenue losses in sales, ad valorem, and severance taxes and mineral royalties ranging from $404.7 million to $1.1 billion (2.3% to 6.9%) during fiscal years 2020 and 2021, with an average total loss of $787.5 million (4.6%).
These losses would be between 1.0% to 2.8% of total local government revenues from all sources, or 1.4% to 4.0% of general revenues (which excludes grants and charges for services). These estimates are based on assumptions that the number of people employed in Louisiana will decrease by 197,000 to 317,000 (as distinguished from unemployment claims) and will take two to five years to recover, along with other specific assumptions about different sectors of the state’s economy, as explained in Appendix A of the report.
Figure 3 reflects the decrease in sales and ad valorem taxes and minera-related revenues municipalities, parish governing authorities, school boards, and sheriff’s for fiscal year 2021 with average scenario. Winn Parish is estimated to have lost 4.5% revenue.
Appendix B reflects estimated effects social distancing and energy market weakness from COVID-19 on local government sales tax, ad valorem tax, and mineral related revenues by parish (showing dollar amounts in thousands.)
Appendix C reflects estimated effects social distancing and energy market weakness from COVID-19 on local government sales tax, ad valorem tax, and mineral-related revenues, by parish and type of entity (showing dollar amounts in thousands.)
View the entire report here: