Gusman signs off on plan to use existing property tax to run Orleans Parish Prison

8th July 2014   ·   0 Comments

By Charles Maldonado
The Lens

Orleans Parish Sheriff Marlin Gusman will ask voters to allow him to use some of a property tax to pay for operations at Orleans Parish Prison. It now goes to pay off bonds, mostly for construction.

The measure could end up paying about half of what the sheriff needs to reform the jail under a federal consent decree.

The proposal was approved Monday by the Orleans Parish Law Enforcement District’s sole voting member: Gusman.

The proposal would not increase property taxes. “The bottom line, so to speak, is that this would not be an increase in the current millage,” Gusman said at the meeting.

Instead, the proposal would reallocate money that is already collected. Under current law, this tax can be used only to pay off bonds for new jail construction — most of which is covered by FEMA — and capital expenses of other Orleans Parish law-enforcement agencies.

According to Gusman’s bond counsel Grant Schlueter, the 2.9 mill tax is expected to generate about $9 million next year, when the proposal would take effect.

After subtracting the amount needed for the Sheriff’s Office’s outstanding debt, up to $5 million could go to jail operations, Schlueter said.

The sheriff needs at least $10 million a year to reform the jail, according to plaintiffs in a federal lawsuit.

For an East Bank homeowner with a homestead exemption, 2.9 mills accounts for $36.25 of the tax bill on a $200,000 home.

Voters must approve the change in a citywide vote in November. The shift in revenue would take effect in 2015 and run through 2024.

If approved, the tax would be frozen at its current level of 2.9 mills, Schlueter said.

State law authorizes the Orleans Parish Law Enforcement District to levy up to 10 mills. In 2006, the tax was bumped up to 4.5 mills, but it was lowered over the next few years.

Mayor Mitch Landrieu mentioned the proposal during a speech on the city’s budget last week.

According to its 2103 annual report submitted to the Municipal Securities Rulemaking Board, the Law Enforcement District was paying off $45 million worth of bonds issued since 2008.

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

This article originally published in the July 7, 2014 print edition of The Louisiana Weekly newspaper.