Mayor Cantrell: The tax cutter

By Christopher Tidmore
Contributing Columnist

Thanks to the defeat of the three municipal property tax initiatives on December 5, Mayor LaToya Cantrell may have earned the status of being one of the foremost tax-cutting local mayors in modern history – without really intending to be. The 4.66 (East Bank)/4.77 (West Bank) reduction in millages at the end of 2021, along with her decision to allow the roll back of the municipal tax by 4.6 mills in 2019, means that the city’s tax rate would have fallen by at least 9.66 mills during Cantrell’s watch.

Mayor Cantrell decided last week – in the wake of the defeat of the three propositions for 2.619, .987, and 1.05/1.164 respectively – not to support another vote on any of the measures and to proceed with the eventual layoffs which she promised if the electorate rejected the measures. This despite the fact that none of these property taxes will expire until the end of 2021. More importantly, every exit poll and survey agrees that three millage initiatives met their defeat thanks to public opposition to Proposition 2, which under Cantrell’s plan would have diverted 40 percent of the Orleans Parish library‘s funding to early childhood education. Thanks to the mayor’s resolve not to re-introduce that property tax in order to continue library funding instead, the library system will see an even greater 50 percent reduction in revenues by 2022.

Still, taxes will go down by almost $320.00 per year for the owner of a $375,000 home on the East Bank by 2022 compared to 2018, if nothing changes. In part, this occurs because LaToya Cantrell and the New Orleans City Council opted only a partial roll forward of millages last year in order to allow the OPSB to make up for a $9.1 million automatic cut in state funding for the city’s schools – due to the higher property assessments penalizing Orleans under the Minimum Foundation Formula – as well as provide an additional $15.1 million for New Orleans schools on top.

When property reassessments in 2019 pushed property tax revenues up across the city, a process required by state law often dubbed “rolling back” automatically dropped rates to offset any increase in revenue that the reassessment would bring. Mostly, since the Nagin administration, mayors and councils had then opted to roll forward, or return (by supermajority) to the previous tax rate. In other words, mayors frequently enacted stealth tax increases, without a public vote. Cantrell opted not to do so last year – at least not fully.

The overall municipal tax millage rate fell by 4.6 mills to 86.09 in 2019. The rate cut might have been even greater; however, the roll back occurred simultaneously as the Orleans Parish School Board rolled forward its millage to collect an extra $325 per student and the Sewerage & Water Board had already done so to invest in repairs. The “deal” as Cantrell referred to coordination of rates between the autonomous agencies still saw the overall tax rate in Orleans Parish drop from around 151 mills to 145.38 on the East Bank and 146.46 on the West Bank (excluding security and neighborhood millages).

A mill is equivalent to a dollar of tax for every $10,000 of a property’s value after subtracting the homestead exemption, if there is one. So if a house was worth $375,000, the property tax rate would amount to between $4,361-$4,494 per household per year. Cantrell therefore saved the average taxpayer about $180.00 per year in 2019, even as the OPSB and S&WB earned more revenue.

The failure of the three propositions, which would have consolidated five different property millages into three, would save that taxpayer another $140.00, even though that means the library system will endure a 50 percent cut in income rather than the 40 percent originally proposed by Cantrell.

The last time that millages were significantly reduced in Orleans Parish was during the Nagin administration when the reforms to properly assess under-appraised homes caused an influx of revenue. In reaction, the then-mayor mostly refused to agree to roll forward millages, so as not to significantly increase the tax burden upon the city’s average citizen. Nagin’s successor, Mitch Landrieu, frequently did opt to employ the revenue-increase method, citing critically underfunded city departments including NOPD.

This article originally published in the December 14, 2020 print edition of The Louisiana Weekly newspaper.