Concluding Remarks
BGR is neither blind nor unsympathetic to the fundamental fiscal challenges facing both the City of New Orleans and the Orleans Parish School Board: how to meet high needs for services with a comparatively low tax base.
Serious funding constraints face both the City and the School Board:
t Any additional property tax, as that tax is presently structured, is strongly opposed by the business community.
t Sales tax in general is a regressive form of taxation (that is, one whose burden falls disproportionately on those least able to pay), and the local sales tax is already at one of the highest rates in the nation.
t Local governments in Louisiana are blocked by the State Constitution from levying any form of income tax.
Given these constraints, a property service charge may be a viable revenue option; but the current proposal is far from the best or only option. The current proposal:
t obligates the City to new expenditures while failing to close old gaps between needs and revenues,
t obligates the School Board to expenditures the proposal fails to fully cover, and
t relies on an undefined agreement to transfer city funds to the School Board, that may be unconstitutional.
Other Options
BGR firmly rejects the often-repeated notion that the City has no other options than the present property service charge proposal.
No homestead exemption on New Orleans’ municipal millage
A better option would be to end the applicability of the homestead exemption to the City of New Orleans’ municipal millage, thereby putting New Orleans on a par with all other cities in the state. Proponents of the property service charge seem to implicitly assume that the “sacred cow” status of the homestead exemption vis-a-vis municipal taxes is unassailable, but this is an assumption that should not be accepted at face value. In 1990, voters in Orleans Parish and statewide approved a constitutional amendment that removed the homestead exemption from a proposed new 10-mill property tax for police and fire protection. Change in the applicability of the homestead exemption in New Orleans has been accomplished once and can be accomplished again.
No homestead exemption on new school board taxes
Another “better option” would be for the Legislature and voters to allow the Orleans Parish School Board and school boards statewide to levy new property taxes with the option that the homestead exemption not apply. Such an approach would not alter any property taxes now in place.
Council-enacted service charge
A more immediate revenue option for the City would be for the City Council to levy an increase in the city’s service charges for specific services. This action can be taken without voter approval and could include a sunset provision to encourage the homestead exemption change.Revised and improved property service charge
Another option would be an improved property service charge proposal, one:
t backed by a clear plan, with terms better defined;
t supported by a clear and detailed ordinance; and
t free of the possibly unconstitutional transfer of funds to another body.
Other
Finally, there remains the option of further reductions in operating expenses, either through increased efficiencies or through the elimination or reduction of certain services.BGR
Commitment
While BGR opposes the December 5 proposition, it pledges its full cooperation in the review and consideration of these or other options.
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