Answer


    As long as the expenditure meets the Cabela’s test, there does not appear to be any prohibition against expenditure by a municipality for economic development purposes. However, the specific purchases for items such as food and drink must still be reasonable under the circumstances.

    The Cabela’s test requires:

    1. the expenditure to be for a public purpose, for which the public entity is authorize to carry out;

    2. the expenditure must not appear gratuitous on its face; and

    3. the public entity should have a reasonable expectation of receiving equal or greater value in return for the expenditure.

    Municipalities are generally authorized to engage in economic and industrial development. The Legislature has recognized the public purpose behind this activity in R.S. 33:9021(10) which states:

    “It is in the best interest of the state of Louisiana and of its regions, parishes, and municipalities to encourage, create, and support public-private partnerships and to permit and encourage participation by representatives of private-sector industries which may benefit from economic development programs, while providing appropriate protections for the public interest.”
Louisiana Legislative Auditor website: 07/16/2025 03:38:30 AM