In The News › Bigger N.O. tax increase readied

Bigger N.O. tax increase readied

Also, garbage fees would go to $24

Wednesday, December 08, 2010
By Bruce Eggler and Frank Donze
The Times-Picayune

A week after the New Orleans City Council passed a 2011 operating budget for the city, members have decided to make major changes to it, including raising property taxes and sanitation service fees even more than they did on Dec. 1.

The council will hold a special meeting this morning to call another special meeting Saturday at which it will consider several measures that Mayor Mitch Landrieu said Tuesday have been agreed to by his administration and at least a majority of the council.

One change, expected to be voted on Saturday, would add 1 mill to the city’s 2011 property tax, meaning a total increase of 7.74 mills from this year’s rate. The increase would still be 1 mill less than Landrieu called for when submitting his budget proposals in October.

Another measure, to be introduced Saturday and voted on probably in January, would raise the sanitation service fee to $24 a month per household, double the current rate. The fee for small businesses eligible for city trash collection, now $24, would rise to $48.

The extra mill of property tax would yield about $2.65 million in 2011 and would replace $2.4 million that the council had intended to raise by increasing the city’s 3 percent tax on parking in commercial lots. That idea has been dropped for what Landrieu called “further study.” All told, the 7.74-mill increase will bring in about $20.5 million.

Councilwomen Stacy Head and Jackie Clarkson said Dec. 1 they had wanted to scale back the millage increase to less than 6.74 mills but could not gain support from a majority of their colleagues. It was unclear Tuesday whether any council members will oppose adding the extra mill, though it appeared Clarkson was prepared to support the new figure.

In his budget address, Landrieu had proposed raising the household sanitation fee to $20 a month to cover a greater share of the actual costs of collecting and disposing of the city’s trash. The council passed that increase Dec. 1 and said it intended to raise the fee even further, to $22 a month, but because of parliamentary rules it could not vote on that measure for three weeks. Tuesday’s agreement adds another $2 to the intended fee.

Setting the fee at $24 for households and $48 for small businesses is expected to bring in about $34 million a year, twice this year’s total, unless the sharp rise leads to an increase in the number of residents who refuse to pay the fee. Although the charge is listed on Sewerage & Water Board bills, it does not have to be paid in order to keep water service.

Even at the higher rate, the fee apparently will still fall a little short of recouping the full cost of the city’s recently revised contracts with the three companies that collect the trash, including the curbside recycling services added under the Metro Disposal and Richard’s Disposal contracts that cover most of the city. The household fee would have to be set at $25.67 to cover all of the city’s costs, Landrieu said.

Landrieu said 2 mills of the property tax will be “permanently dedicated” to recreation programs “to ensure that our youth will have the world-class recreational opportunities that are worthy of their great promise — now and for all future generations.”

A little more than 1 mill already is dedicated to the Recreation Department, meaning a total of about $8.2 million would be dedicated in 2011 to the new Recreation Development Commission that will replace the old department sometime next year. Landrieu had promised a total of $10 million for recreation in 2011, but $2 million is slated to come from federal grants, not from the city’s general fund.
However, the term “permanently dedicated” for the 2 mills has little if any legal force. Because the dedication has not been approved by voters, the council could decide at any time to redirect the money to another purpose.

In passing the original 2011 budget, the council voted to reduce the appropriation to pay the city’s utility bills by $5.2 million. It planned to restore that money, which won’t be needed immediately, after approving higher sanitation fees and parking taxes in January. It now will be able to do that after it approves the millage and sanitation fee increases.

Landrieu said the idea of a parking fee increase, which was proposed recently by Bureau of Governmental Research President Janet Howard, “had some merit” but he “would have had to exercise a very small veto” if the council had passed it.

He said the final agreement with the council, to raise the millage less but the sanitation fee more than he proposed, “was really a win-win for everybody.”

It is possible that legal challenges could be filed against the decision to raise the property tax in the way proposed. The Louisiana Constitution requires any government agency wishing to “roll forward,” or increase, its millage rate to give public notice by July 15 of its intention to hold a public hearing to consider such an increase “at the hearing.” The council held that hearing Dec. 1 and voted on the millage at that time, so an opponent could claim it has no right to revisit the issue 10 days later.

In addition, state law says that before holding a meeting at which it will vote on increasing millage, a public body must give public notice “on two separate days no less than 30 days before the public hearing.” Again, opponents could claim that the council had to give 30 days’ advance notice of Saturday’s meeting.

The city probably would take the position that Saturday’s session does not constitute a new hearing but is a continuation of the process begun at the Dec. 1 meeting. Therefore, the city would argue, reopening the issue does not violate the state’s advance notice requirements.

Another possible legal objection could be that the city failed to give the required 24-hour advance notice of Wednesday’s special meeting. Although a notice was posted outside the council clerk’s office at about 9 a.m. Tuesday, it said the meeting would be on “Tuesday, December 8.” It was not corrected to say Wednesday until at least 11 a.m., less than 24 hours before Wednesday’s 9:30 a.m. meeting.

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