City seeks more taxes on April 9
4th April 2016 · 0 Comments
MILLAGE PROPOSITION FOR FIRE AND POLICE: Vote NO
This Saturday’s election will ask Orleans Parish voters to approve a $26.6 million annual property tax hike for police and firemen. The 7.5 mill increase would boost the homeowner’s average tax bill by five percent, with these taxes not subject to the Homestead Exemption. Everyone would pay on the full value of his or her home.
The hikes amount to $225 per year for a $300,000 home and actually constitute two tax increases. The 5 mill increase for police will boost the department’s budget by $17.73 million a year. Another 2.5 mill hike in the tax for fire protection would provide another $8.87 million a year. Currently, both those taxes now are set at about 5 mills.
The increased millages would drive the Orleans East Bank tax rate to 159.28 mills. The West Bank rate would rise to 153.21 mills. That’s up from 147 mills just seven years ago, or a hike of hundreds of dollars in the average middle class homeowner’s tax bill.
The tragedy is that the Council could have held at 147 mills over the last decade, or even less, if our elected officials had kept the promise that the majority of them swore before the Editorial Board of The Louisiana Weekly.
The voters then could have opted to boost the NOPD and NOFD millage to the same amount as proposed in Saturday’s election, but the new tax rate would still amount to far less than the present 159.28 mills—even counting the library millage approved last year.
Hundreds of dollars less would flow out of the average family’s pocketbook, if Orleans’ political class had kept their promises. The electorate might wish to mull over this truth upon entering the voting booths on April 9, 2016.
Admittedly, even the harshest critics of new taxes see the laudable purposes of both hikes. The Bureau of Governmental Research, which had opposed the 2015 new library tax and other millage increases in recent years, endorsed the 7.5 mills for police and fire.
The New Orleans Police Department needs another $8 million to bring its compliment up to 1,266 officers, the hiring goal for 2016. Overall, it will require $35 million to $40 million more a year than the $140 million the city has budgeted for the department this year to field a force of 1,600 officers — the long-term goal of the Landrieu Administration that enjoys wide public support. The 5 mills will underwrite those increases for the first two years.
The 2.5 mill for the Fire Department comes from what the Mayor described as a “landmark deal” last autumn with the firefighters union to settle a decades-old lawsuit over $75 million in back pay owed to firefighters. The millage increase would pay off the debt over the next dozen years, with any additional money from the tax shoring up the firefighters’ underfunded pension system.
Without the new taxes, the personnel necessary to fight the spiraling murder rate would not materialize, and attrition could so affect the NOFD that insurance rates could skyrocket as emergency response time decreases. If it were just a question of the 7.5 mills, no rational voter should oppose the tax increase. They would pay more in insurance — or find the lives of their loved ones in danger.
Here’s the problem. Mayor Mitch Landrieu and the City Council are asking us to raise our millage rates with a public vote after years of hiking our taxes without asking the electorate to approve their increases in taxes. Politicians know this shell game as “rolling forward.”
The whole idea of a “Single Assessor for New Orleans” — and the related movement for “truth in property valuation” — was predicated on the idea if housing was properly assessed, the taxable amount would bring in more revenue to city coffers. That would allow the overall tax rate to decrease on everyone. In theory, it was argued at the time, proper valuation would allow the homeowner to pay the same in taxes as he or she had when their house was undervalued.
In other words, as more dollars came in, the tax rate would “roll back,” as state law requires. The concept worked for a while during the Nagin Administration. The overall millage rate decreased from over 170 to 147, making property tax rates in Orleans competitive with the rates in the surrounding parishes. The tax rate in Jefferson amounts to just over 105.
Moreover, as tax rates went down, or “rolled back” to an amount that produced the same amount of monies that were produced the year before per state law required, young people began to buy homes in Orleans Parish. The suburban out-migration of the 1970s-1980s began to reverse, bolstering neighborhoods that were pronounced permanently dead after Katrina. The city’s population rebounded as potential buyers noted that tax rates were not much higher than the surrounding parishes (and, in some cases. homes were more affordable.)
Critics warn that if the tax rate starts edging up too high, that progress in population could reverse. Regardless, though, tax rates should have decreased even further than 147, since the city began to have a broader tax base as well as properly valued houses. Momentarily, millage rates did during the Landrieu Administration, only to be “rolled forward” after “rolled back.”
Take this obscure public notice run in small, fine print on Wednesday June 24, 2015, by the city in The Times-Picayune. “Notice is hereby given pursuant to Article 7, Section 23© of the Constitution and R.S. 47:1705(B) that a public hearing of the Council of the City of New Orleans in Orleans Parish will be held at its regular meeting place, City Council Chamber…to consider levying additional or increased millage rates without further voter approval or adopting the adjusted millage rates after reassessment and rolling forward to rates not to exceed the prior year’s maximum. The estimated amount of tax revenues to be collected in the next tax year from increased millage is $314,902,830, and the amount of increase in taxes attributable to the millage increase is $13,889,057.”
Phrased another way, the City Council met to vote by “Super Majority,” or with five votes as opposed to the normal four, to “roll forward” the millage that the increased revenues had just required them to “roll back.” Without a public vote, the Council increased taxes by almost $14 million, or just over half of the amount that Councilmembers seek in this Saturday’s election.
Since 2010, the New Orleans City budget has increased by over $100 million, mostly without public approval of increased millages. Even putting higher fines and rate hikes aside, property tax increases constituted the lionshare of that sum. The irony is that to win the endorsement of The Louisiana Weekly, every single member of the current City Council indicated that they would not “roll forward” millages during their terms. That they would seek a public vote for increased monies, and work to amend both the City Charter and the State Constitution to require a public vote to roll forward millage after rolling them back.
It is a covenant of Louisiana politics that the voters in any parish have the final say before taxes increase. It is the electorate’s final check on the purse strings of the politicians. By acting contrary to their pledges, one could argue that these Council members have violated the spirit, if not the letter, of both state and municipal law — while repeatedly promising to our newspaper’s editors that they would not do so while in office.
It is not as if they had another choice. In contrast, the Jefferson Parish Council opted to keep millages rolled back over the last decade. Partially, this was due to the resolve of former Jeff Parish President John Young, who threatened to veto any “roll forwards,” but the Councilmembers acted according to their promises to our Editorial Board nevertheless.
Moreover, when the Jefferson budget needed more money for fire protection, for example, they went to the voters—and received approval. Other parochial bodies, like Jefferson Sheriff Newell Norman did “roll forward” millages without a vote, but the millage rate remains lower than a decade ago.
More importantly, the confidence of the electorate that they are not being deceived has remained high as well, making these taxophobic voters open to higher millages in Jefferson Parish. The question remains whether voters aware of the “roll forward” machinations of the New Orleans City Council will be equally open on Saturday, April 9.
BOND ISSUE FOR INFRASTRUCTURE AND FIRE TRUCKS: Vote Yes
As opposed to the tax increase, this simply leverages the city’s bond capacity in order to provide the matching funds for the over $2 billion in Federal FEMA funds. The $2 billion settlement from Hurricane Katrina will be used to make a dent in the almost $9 billion in street repairs the city needs. Most importantly, the vote calls for no increases in the millage rate to be levied in the 25.5 mills currently being levied to pay General Obligation Bonds of the City.
This article originally published in the April 4, 2016 print edition of The Louisiana Weekly newspaper.
