Government & Politics
 

School board, city in talks about diverted property taxes

The Orleans Parish School Board has been talking to the city of New Orleans over the city’s questionable diversion of millions of dollars in taxes, including those for public schools, the school board’s attorney confirmed Thursday.

As The Lens reported earlier this month, the city used between $3.7 million and $4.2 million annually in property taxes — meant for drainage, schools, flood protection and public safety, among other things — to make contributions to several state retirement systems.

The city is required by law to contribute to five state retirement systems, for the offices of the clerk of court, sheriff, registrar of voters, district attorney and parish assessor. Those contributions are set at a percentage of the total property tax collected by the city, including taxes that are earmarked for specific purposes and those that aren’t.

But local governments are not allowed to use special property taxes for anything not approved by voters, according to state Supreme Court rulings and an Attorney General’s opinion. That includes pension contributions, according to a lawsuit filed by the Downtown Development District. (The city disputes that reasoning.)

The Downtown Development District levies a property tax to pay for security and infrastructure projects in the Central Business District. That tax, like others, is collected by the city.

The development district claims the city misdirected about $380,000 of its taxes between 2013 and 2018.

The school board could have lost out on much more. Spreadsheets filed by the Downtown Development District in its suit show the city used more than $1 million annually in school taxes to pay the retirement systems. The city collects about $150 million annually in property taxes for schools.

Sharonda Williams, an attorney who represents the school board, attended a scheduled hearing in the lawsuit on Thursday.

Asked if the school board had contacted the city about the issue, Williams said, “We’ve had some additional discussions, and that’s why we’re here to watch.”

She declined to elaborate and wouldn’t say if the school board had taken a position on the city’s use of the taxes.

LaTonya Norton, a spokeswoman for Mayor LaToya Cantrell, declined to comment for this story, citing the ongoing lawsuit.

Bill Aaron, an attorney for the Downtown Development District, and attorneys for the city agreed to postpone Thursday’s hearing until July. Civil District Court Judge Piper Griffin granted the extension with the expectation that an agreement could be in the works.

After the hearing, Aaron told The Lens that he has been contacted by other government agencies. He wouldn’t say which ones.

Next to the school board, the Sewerage and Water Board of New Orleans, which levies a tax for drainage work, saw more of its taxes diverted to pension funds than any other agency besides the city itself. A spokesman for the Sewerage and Water Board did not immediately respond to a request for comment.

This story was updated with a response from Mayor LaToya Cantrell’s office. (May 31, 2018)

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About Charles Maldonado

Charles Maldonado covers the city of New Orleans and other local government bodies. He previously worked for Gambit, New Orleans’ alternative newsweekly, where he covered city hall, criminal justice and public health. Before moving to New Orleans, he covered state and local government for weekly papers in Nashville and Knoxville, Tenn.