A New Orleans property tax increase sought by Mayor Mitch Landrieu is quietly making its way through the Legislature, which is the first step in a series of necessary approvals.
The approximately 1.5 mill increase would raise $5.6 million for fire and police protection starting in 2014. That would increase to $5.9 million the next year, according to the fiscal note attached to House Bill 290.
The money could help city officials pay for two federal consent decrees, one regarding the New Orleans Police Department and the other affecting the Orleans Parish Sheriff’s Office. It also could shore up the sagging firefighters pension fund.
The increase would cost the owner of a $200,000 home $30.80 a year. A majority of voters statewide, as well as a majority in Orleans Parish and the City Council, eventually would have to approve the matter before it could take affect.
State Rep. Walt Leger, D-New Orleans, is sponsoring HB 290 at Landrieu’s request.
“We have a number of public safety issues in the city,” Leger said. “We have two consent decree issues – for OPP and NOPD. There might be a need to hire more police. We have a pension problem with firefighters. The constitutional amendment is necessary to empower the City Council in case it wants to raise millages for the purpose of police and fire protection.”
The measure is still in a House committee and has several more steps before it would be approved by the Legislature.
Local and federal officials estimate the police consent decree, which was approved in January, will cost the city $55 million over five years. The Sheriff’s Office consent decree has not yet been approved, and funding won’t be determined until a July hearing in U.S. District Court, but estimates from the administration and Sheriff Marlin Gusman have added costs going into the tens of millions per year. Landrieu has said the combined costs of the two decrees would force massive employee layoffs and furloughs.
If approved by the Legislature, the tax increase would go before voters statewide in November 2014. That’s because the city’s maximum millage rate is set by the state Constitution. As with all such amendments that deal with local issues, the matter wouldn’t pass unless a majority of voters statewide and in New Orleans approve.
The current millages in Orleans Parish are 5.26 for police and 5.21 for fire, according to the city’s budget. Leger’s proposed constitutional amendment would let the City Council raise each one to 6 mills, or .74 mills more for police and .79 more for fire. Property owners don’t receive the benefit of the homestead exemption on the millages, so they are levied against a property’s full assessed value.
Landrieu spokesman Ryan Berni disputed that the mayor wants to increase taxes. Rather, the mayor simply wants to give the City Council the ability to do so if it chooses, Berni said.
Indeed, New Orleans City Council member Stacy Head said she supports HB 290 because she believes in giving the council the flexibility to increase millage rates for a dedicated purpose. But Head said she opposes this specific increase because the city has imposed too many other tax or fee increases since Landrieu took office.
City tax rates have gone up by about 9 mills since the 2010 fiscal year, former Mayor Ray Nagin’s last year in office. That’s about $130 for a $200,000 property with a homestead exemption. The monthly Sewerage & Water Board sanitation fee has doubled to $24 since 2010. And last year, the council passed a Landrieu-backed plan that will more than double water bills by 2020.
“This is a logical move to get a dedicated tax stream for a purpose we need desperately,” Head said. “But there have been so many other increases under this council and this mayor. I don’t know that the people can handle one more.”