Contact: Victor J. Franckiewicz, Jr., President & CEO
(504) 525-4152, ext. 12

The Orleans Parish Assessors, the Louisiana Tax Commission, the Louisiana Legislature, and the general public all have roles to play in improving the administration of property tax exemptions, and citizens and property owners need to stop thinking of exemptions as "free money," according to a new report by the Bureau of Governmental Research (BGR).

"Our research for this report revealed several significant findings about property tax exemptions," stated BGR President & CEO Victor J. Franckiewicz. Jr.:

• The "cost" of non-profit exemptions in Orleans Parish is now about $200 per person; in addition, the homestead exemption costs about $154 per person.
• Property tax exemptions are constitutionally protected in Louisiana, a practice distinctly different from the vast majority of states. The constitutional provisions governing nonprofit exemptions are vague, and indulgently allow nonprofits to use exempt property for non-exempt purposes.
• There is no systematic monitoring of tax exemptions, and the Louisiana Tax Commission does not review exemptions granted at the local level. As a practical matter, the only time an exemption would come to the attention of the tax commission is when an exemption is denied and later appealed to the tax commission.

BGR found no single "model" state for the administration of exemptions. However, based on an evaluation or practices nationwide, BGR developed a model application form for exemptions. "What we learned strengthened our support for reviewing and tightening up constitutional and legislative provisions governing exemptions. Many other states have essentially the same type of exemptions as Louisiana, but require much more information before approving an exemption," Franckiewicz observed. "We also recommend that periodic reapplication be required to insure that properties do not retain exemptions that are no longer justified."

The research also addressed overall assessment administration in Orleans Parish. It revealed some surprising findings:

• Assessments are acceptable under Louisiana Tax Commission standards. However, those standards are minimal, and the methodology used by the commission to test the accuracy of assessments in Orleans Parish probably makes the assessments look more accurate than they are in reality.
• Orleans Parish’s seven independent assessors (and assessors statewide) are paid well above national averages.
• Assessors in Louisiana also enjoy a generous statewide retirement program to which New Orleans is required to contribute at a rate four times higher than any other parish. (One percent of collectible property tax versus ¼% for other parishes.)
• Overall, the assessors’ budgets appear to be adequate, and actually exceed national benchmarks published by the International Association of Assessing Officers, which is the recognized professional association in the field. BGR estimates the combined budget of the assessors in Orleans Parish at $14.90 to $16.05 per parcel, which is higher that the national benchmark of $12.31 to $14.78.
• Even though the assessors’ gross budget may be adequate, a large share of the resources available is consumed by the salaries and expenses of the seven independent assessors, leaving less funding available to support a larger, specialized technical staff necessary to carry the workload.

BGR does not recommend eliminating exemptions for legitimate nonprofit organizations that perform a public service in return for an exemption. Nor does it take a position in this report on eliminating Orleans Parish’s system of seven assessors, which dates back to the 19th century. The report does not revisit BGR’s 20-plus years of advocating homestead exemption reform. However, it does address the costs and implications of all of these policy choices. It also recommends consolidating and reorganizing the collective workforce of the seven assessors’ offices to use existing personnel more effectively.

The report provides 48 specific recommendations addressed to the public, the assessors, the Louisiana Tax Commission, and the legislature.

Serving on the Review Committee for the project were the following BGR Board members:

Norma Freiberg, Chair

Terrel J. Broussard

Jean C. Felts

Ti A. Martin

Dionne M. Rousseau

Leonard V. Wormser

George H. Porter, III, M.D. (ex officio)

Anne M. Milling (ex officio)

Principal author and researcher for the project was Noel C. Tobin, under the supervision of BGR Research Director Patricia E. Morris.

The report consists of two separate publications. The first is a 20-page Summary and Recommendations; the second is the full report with nine appendices. Copies of both publications are available from BGR, and may be accessed thorough BGR’s website, www.bgr.org.

BGR is a private, nonpartisan, nonprofit citizen-supported research organization founded in 1932 and dedicated to informed public policy-making and the effective use of public resources in the New Orleans metropolitan area.

Additional information about BGR may be obtained at 525-4152, or by visiting BGR’s website.

BGR is a private, nonpartisan, nonprofit, citizen-supported research organization dedicated to encouraging informed public policy-making and the effective use of public resources in the New Orleans metropolitan area.