CATS Tax Challenge

CATS Tax Challenge

Plaintiff Says La. Supreme Court Already Decided A Similar Case

BATON ROUGE — District Judge Todd Hernandez will hold a hearing next Friday, Oct. 12 on a suit to throw out the $180 million CATS transportation tax approved by voters April 21.

The suit, filed by local businessman Milton Graugnard, says the 10.6-mill property tax is a violation of equal protection of the law under both the 14th Amendment to the U.S. Constitution and Article I, Section 3 of the Louisiana Constitution.

Graugnard’s attorney, Kyle Keegan, says the case is very strong because the Louisiana Supreme Court has already ruled on a similar case.

In that case, Arkansas & Louisiana Ry. Co. v. Goslin, the plaintiff said he was forced to pay a property tax to a levee district for flood control purposes but that property owners in other parishes downstream were getting the benefit.  The state supreme court ruled that would be a violation of equal protection.

The court said, “It is alleged that the exemption of these three parishes from the District relieves the taxpayers therein from bearing their fair share of the tax burden assessed for the construction, operation and maintenance of the proposed project, notwithstanding that they, as aforesaid, receive the same benefits as the taxpayers in the other seven parishes.  If these facts are correct…the exclusion of the three named parishes does constitute an arbitrary discrimination violative of the equal protection clause of the Federal Constitution.”

In his suit, Graugnard says that the Capital Area Transportation System (CATS) serves areas of the parish outside the taxing district.  The taxing district is the City of Baton Rouge and the City of Baker.

CATS serves areas such as Mall of Louisiana and Towne Center, but these areas are outside the city limits and therefore pay no property taxes.

Graugnard argues that it is wrong to make property owners inside the city limits pay taxes for services outside the city limits.

The hearing next Friday before Judge Hernandez will deal with exceptions filed relative to the City of Baker.  Because the issues in this suit are almost exclusively matters of law and there are few issues of fact, the case could be a candidate to be decided based on a motion for summary judgment.

Unless the $18 million a year tax is thrown out, property owners in Baton Rouge and Baker will see their property tax bills go up Dec. 31.

On June 27, CATS announced it would be selling $3 million in bonds based on that tax.  If Graugnard’s suit is successful, the validity of that bond issue would be in question.

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