Louisiana Tax News: Hosston’s Controversial 12% Rate
Hosston’s 12% Sales Tax: A Short-Term Boost with a Long-Term Price Tag
Hosston, Louisiana, is facing a new Tax Increment Financing (TIF) sales tax that could push the total sales tax rate to around 12%. Yes, you read that right—twelve percent and it is being implemented by the district. The 2% tax increase was proposed by the Caddo Parish Commission, without the approval of Chris Kracman,the commissioner that represents north Caddo Parish, including Hosston.
You can hear the latest interview with Commissioner Kracman on 710 KEEL HERE
Of course, most of us understand that local governments need money. Roads don’t pave themselves, and somebody’s got to pay for those fancy street lights, but is jacking up the sales tax the best way to do it? Short-term, it may seem like a great idea, but long-term, it could end up being like eating a gas station corndog—seems fine at first, but you’re going to regret it later.
Why a 2% Tax Seems Like a Good Idea at First
- Instant Cash Flow – TIF taxes are like a financial time machine. The district gets to fund projects now by borrowing against future tax revenues.
- Shiny New Things – With more money in the budget, there’s potential for infrastructure improvements, business incentives, and maybe even a new park bench or two.
Why the 2% Tax Could Backfire
- People Aren’t Dumb (generally speaking)– Consumers will drive to the next town over to avoid paying that extra tax. And if they don’t have to drive (thanks, Amazon), they’ll just click their way to a better deal. Goodbye, local business.
- Businesses Have Legs – You think a small business wants to set up shop where people are already looking for an escape route? High taxes can send those future businesses packing to friendlier tax zones. Take St. Vincent's Mall for example.
- Sales Tax is Regressive – This hits lower-income folks the hardest. You and I may just grumble about it, but for some families, an extra few bucks per shopping trip matters.
- It’s Volatile – Relying on sales tax means you’re betting the town’s future on people spending money. But what happens in a recession when spending dries up? Spoiler alert: budget crisis.
Nobody, of course, would argue against improving communities. The parish needs better roads, more services, or a fresh coat of paint on City Hall, let’s figure it out, but a TIF that results in a 12% sales tax, is not the way to go. It's just not a long-term solution—it’s a short-term band-aid on a budget that’s going to need stitches later.
If we aren't careful, this could turn into one of those situations where we look back and think, "Remember when we thought this was a good idea?" Right before we start looking for ways to undo it.