Increased property tax collections continue to fuel city’s budgets

28th October 2013   ·   0 Comments

By Charles Maldonado
The Lens

The New Orleans City Council started its 2014 budget hearings Wednesday with the fundamentals: the proposed tax collections and revenue estimates that are the basis for Mayor Mitch Landrieu’s $504 million general fund proposal.

Landrieu’s budget would keep the city’s property tax rate steady next year, though city economist James Husserl predicts collections will increase modestly to $114.9 million, from $111.6 million currently forecast for 2013. But the 2014 figure is still below the $115.7 million that appeared in the 2013 budget as originally passed.

Councilwoman Stacy Head said the city’s budget relies too much on property taxes. Collections have increased steadily over the past decade, even as the city has shrunk. The Landrieu administration increased property tax rates in the 2011 budget, and assessments have risen sharply in recent years.

“There is a smaller population than we had in 2005 that is paying $40 million more in property taxes,” Head said. “I firmly believe that there is an overburdening of taxation among a smaller group of people.”

Though the city has about 70,000 fewer people than it did pre-Katrina, property tax collections in the budget proposal are up 38 percent, from $83 million in 2005. The increase in property tax collections accounts for nearly all of the increase in the general fund budget, which has gone up from about $466 million in 2005 to next year’s proposed $504 million.

The mayor’s budget proposal also counts on about $1.3 million in increased sanitation fee collections, which he hopes to achieve with a proposed council ordinance allowing the Sewerage & Water Board of New Orleans to shut off water service to customers who don’t pay the $24 monthly fee. Landrieu first proposed the controversial measure for the 2013 budget, but it failed to make it to a council vote.

Just as Landrieu has left the task of paying for the Orleans Parish Prison consent decree up to the council, Head said the sanitation fee proposal should be left up to the mayor. She noted that the state law allowing the city to collect trash fees through the Sewerage & Water Board also allows the utility to shut off water for failing to pay them. Head said the executive branch only has to draft a new agreement with the board.

“This is a difficult policy decision and I’m sure you’d love to pass that hot potato to us, but the law is clear,” she said. Of course, any agreement between the city and the utility would ultimately have to be approved by the council.

The two members of the public who commented on the revenue budget both criticized the sanitation fee proposal.

“My question concerns the correlation between the sanitation fees and water shutoffs,” said Donald Chopin. “What authority do you have to shut anyone’s water off because they didn’t pay their sanitation fee?”

Councilwoman Jackie Clarkson moved to adjourn the morning session about 1 p.m.

“Can’t we just keep going?” Head asked.

“No, we’re not working through lunch,” Clarkson said.

This story was originally published by The Lens (thelensnola.org), an independent, nonprofit newsroom serving New Orleans. The Louisiana Weekly enjoys a partnership with The Lens.

This article originally published in the October 28, 2013 print edition of The Louisiana Weekly newspaper.