BGR comes out against proposed city elderly services tax

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A new report by the Bureau of Governmental Research urges New Orleans residents to vote against a new property tax that would raise money for services and programs for the elderly.

While the report, released Tuesday, agrees that there is a need for greater funding for elderly care, it argues that the City Council didn’t do enough legwork to justify a dedicated property tax increase. It notes that the Council has yet to lay out how the money would be spent or even define who is included under the banner of “elderly citizen.”

“The proposition lacks the support of a comprehensive, prioritized assessment of the elderly’s needs and a clear plan to direct tax funding to high-priority needs,” the report says. “Without a more complete picture of the City Council’s intent, BGR cannot determine whether the tax is appropriately sized.”

Voters will decide the fate of the tax at the polls on March 30. If it passes, it was impose an additional 2 mills of property tax. That would mean $25 in new taxes for a $200,000 house with a homestead exemption. The report estimates that commercial properties would be subject to $28 per $100,000 of property value. Property taxes currently stand at 151.08 mills on the East Bank and 151.36 mills on the West Bank.

The tax would start in 2020 and expire at the end of 2024. BGR estimated that in the first year, the tax would generate $6.6 million. According to the report, the City Council based the size of the tax on what the New Orleans Council on Aging says it needs.

The Council of Aging, a quasi-public body that provides meals, care, and recreation to New Orleans seniors, had a $5 million budget in its 2018 fiscal year. About $1.5 million of that came from the city. That includes about $917,000 from the city’s general fund and $563,000 in federal grant funds passed through the city. This level of local funding for elderly care, according to the report, lags well behind most of Louisiana’s other large parishes, such as East Baton Rouge, Jefferson, and St. Tammany.

Still, the report says that there could be better ways to get money to seniors, such as increasing general fund allocations.

The Bureau of Governmental Research has questioned the city’s many tax dedications in the past. A 2015 report recommended that the city reevaluate its tax structure and consider which taxes should be considered for rededication for general municipal purposes, where they could be used to address the city’s pressing needs. The report said the city’s dedicated taxes “were approved in piecemeal fashion over the course of many years with little planning and accountability.”

The elderly tax fits that pattern, according to the report released Tuesday. Though the ballot proposal says that the tax will be used “solely for the purpose of paying costs of services, programs, other resources and other lawful expenses for elderly citizens of the City, as further defined by ordinance,” the City Council hasn’t offered such an ordinance.

That means it’s unclear which programs will be funded or which agencies will receive tax dollars. Though it’s assumed that the Council on Aging would benefit, the language in the ballot proposal doesn’t designate a recipient. The report also notes that the ballot language doesn’t define who qualifies as an elderly citizen.

“There is a wide range of potential uses of the millage revenue, from essential daily care to social activities and senior information fairs. Without a more complete picture of the City Council’s intent, BGR cannot determine whether the tax is appropriately sized,” the report says.

Mayor LaToya Cantrell leveled similar criticisms of the tax in 2018. But the City Council moved forward the plan anyway. Cantrell said she would rather increase taxes for wider public health goals, which would include elderly care. She told the authors of the report that she wants to propose such a tax after 2019.

Her administration has also complained that the election, which will feature this issue alone, will cost the city $440,000, according to a report in The Advocate.* Just over a month later, on May 4, New Orleans residents will vote on another tax proposal, this one for parks.

*Correction: As originally published, this story noted a discrepancy between the cost of the March 30 election as reported in The Advocate —$440,000 — and the cost cited by BGR — $480,000. That was based on an advance version of the BGR report provided to The Lens. BGR corrected the figure in the final published version of its report. (March 13, 2019)

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