Summary of Proposal
On December 5, voters in Orleans Parish will be asked to approve a property service charge on residential and commercial property—presumably land, though land is not specified in the ballot proposal. The service charge, which is expected to generate $47.7 million per year, would be used primarily to finance raises for most city workers and all public school employees. The property service charge would be applied uniformly on a per square foot basis, as shown in the table below.
Proposed Property Service Charge Type of Property Charge Residential 5 cents per square foot Commercial 9 cents per square foot Vacant Land $200.00 per acre for fewer than 5 acres
(.0045 cents per square foot)$ 100.00 per acre for 5 - 25 acres $50.00 per acre for 25 - 100 acres $10.00 per acre for 100 acres or more and for
land outside the levee protection area for
which there is no accessCaps Maximum annual charge of $35,000 on commercial
property and unimproved vacant property Maximum
annual charge of $2,000 on residential property
(as proposed by City Council Ordinance No. 22,273)
Exemptions from Property Service Charge
Types of property exempt from the proposed service charge are:
1) property owned by a person sixty-five (65) years or older with a homestead exemption, who is below federal poverty guidelines,
2) all property owned by local, state, or federal governments; and
3) property owned by all non-profit institutions exempt from ad valorem property taxes.
Cost to Property Owners
The owner of a home on a 50-by-100 foot square foot lot would pay $250 per year for the property service charge. The owner of a 10,000 square foot lot in commercial use would pay $900 per year.
Proposed Use of Property Service Charge
The proposed service charge would be used primarily to fund raises for the city and school board employees. All the proposed uses are shown in the table. The amounts and percentages listed in the table are taken from press releases issued by the Mayor’s Office, City of New Orleans. No dollar amounts or percentages setting the proposed expenditure of funds appear in either the election resolution approved by the City Council or in any other legally binding document. Thus, the entire $47.7 million is not legally dedicated to these specific expenditures or functions in 1999 or beyond.
Proposed Use of Property Service Charge Purpose Amount Percent City of New Orleans Provide pay increases for
non-uniformed city employees$22 million 44 Permanently fund 200 additional
police officers$6.5 million 13 Reduce city’s projected deficit $5.0 million 10 Eliminate city’s amusement tax $2.0 million 4 Open city libraries on Fridays $1.5 million 3 Orleans Parish School Board Provide pay increases for all
public school employees$13 million 26 Total $50 million* 100 * Estimated yeld has been reduced to $47.7 million
by the City because of changes made to the proposal.
No corresponding adjustment to allocations has been made.
It should also be noted that although the proposed distribution totals $50 million, the City, subsequent to issuance of the news release, announced that a revised estimate on the yield is $49 million. With the addition of a proposed cap on the charge on residential property, the latest estimate on the yield is $47.7 million. It is not clear in which category(ies) the $2.3 million reduction would occur. The cost of collecting the property service charge has not been estimated so has not been deducted from the estimated yield.
Effective Date
There is no expiration date or sunset provision for the proposed property service charge. The property service charge would commence in 1999. The additional property charge would be listed as a separate item on ad valorem tax bills mailed in December 1998 and due at the end of January 1999.
Election Provisions
The election will be held on December 5, 1998 under the “emergency provision” of state law and the state election code. The City Council, by a vote of 6 – 1, approved Resolution R-98-647, which calls the December 5, 1998 election and provides the ballot language (see the back cover for the specific ballot language). The Orleans Parish School Board, also by a vote of 6 – 1, approved a resolution on October 12, 1998 to withdraw a 13-mill property tax proposal from the November 3, 1998 ballot in favor of the joint property service charge on the December 5, 1998 ballot.
The City of New Orleans and the Orleans Parish School Board have each agreed to provide half of the $400,000 estimated cost of holding the special election. In addition, the City and the School Board have each agreed to spend $500,000 for an educational campaign on the proposal.
BGR assumes no responsibility for content outside the domain bgr.org.