The New Orleans City Council on Thursday voted to send two proposed property tax increases, backed by Mayor Mitch Landrieu, to the city’s voters on April 9. The two increases are being grouped together in a single ballot proposition, and they would bring in $17.7 million for the police and $8.9 million for the fire department.
The fire department’s increase will allow the city to pay off a $75 million back pay settlement with the firefighters union, negotiated last year. The increase for the police department will be used to pay for additional officers, with a goal of increasing the police force to 1,600 officers by 2020 from fewer than 1,200 as of the end of 2015. They will go into effect next year if approved.
Unlike other property taxes, the police and fire taxes are levied against a home’s full value, without taking the $75,000 homestead exemption into account.
In a press conference on this week, Mayor Mitch Landrieu urged New Orleanians to vote in favor of it, saying the city otherwise will have trouble paying the settlement or expanding the police force.
“If we don’t do this, in 2017 and beyond, there we be a gap between the amount of money we need and the amount of money we have,” Landrieu said.
April will be the second time the increases will appear on ballots in the city. Because resetting the maximum allowable tax rates required an amendment to the state constitution, the proposal went before voters statewide in the November 2014 election. That vote reset the allowable cap on the property taxes, first approved by voters in 1990, from 5 mills to 10 mills each. A mill is 0.01 percent of a property’s value. For example, on a house worth $100,000, one mill is worth $10.
Implementing the higher rates requires another vote, this one just for the city. The Landrieu administration delayed requesting a vote until now.
The language in the ballot proposition would increase the maximum tax rates by 2.5 mills for the fire department, from 5.21 mills to 7.71 mills, and 5 mills for the police. As a result, the police tax could nearly double, from 5.26 mills to 10.26 mills.
That is slightly above the constitutional maximum the voters approved in 2014, but it is legal, First Deputy Mayor and Chief Administrative Officer Andy Kopplin said in an interview. Effective rates for both taxes have been above the former 5-mill cap since 1992. Because of decreased property values, the city raised them that year, setting a new ceiling for the tax rates. In spite of the cap in the constitution, a 1993 opinion by the state Attorney General’s Office said the maneuver was legal under another constitutional provision. The effective maximum rate and the legal reasoning behind it was not reset by the 2014 constitutional amendment, Kopplin said. The State Bond Commission is expected to review the ballot proposition for constitutional compliance next month, the last step before it can go to voters.
Wondering how the proposed increases will affect your property tax bill? Use our property tax calculator below.