Baton Rouge expects to realize net present-value savings of 9% with next week’s sale of $19.9 million of sales-tax revenue refunding bonds, which will refund outstanding debt from a 2001 issue.

The bonds are supported by a 2% sales and use tax within the city limits. Outstanding sales tax-supported debt after the issuance will total $113.2 million.

The city’s sales tax revenue debt is rated Aa2 by Moody’s Investors Service and AA-plus by Fitch Ratings and Standard & Poor’s.

Baton Rouge and East Baton Rouge Parish operate as a consolidated government. Outside the city, the parish collects a 2% sales tax. Funds flow between the between the city and parish as needed under a local service agreement.

Sales tax collections within Baton Rouge were up 14% in 2005 and 11% in 2006 as the area’s economy flourished due to population increases after two hurricanes hit the New Orleans area. Sales tax revenues flattened in 2007 and 2008, and fell almost 11% in 2009. However, total collections dropped only slightly as activity in the non-incorporated areas of the parish remained strong.

Total debt service will peak in fiscal 2012 at $15.9 million and then fall to $9 million in fiscal 2013.

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