In The News › City officials eyeing new and extended taxes to pay for streets, drainage work

City officials eyeing new and extended taxes to pay for streets, drainage work

By Jeff Adelson

The Advocate

January 19, 2016

New Orleans voters probably will be asked to extend a drainage millage later this year, and the city could be seeking unspecified additional money to pay for upgrades to the stormwater system down the road, officials said Tuesday.

Both ideas were described as necessary to keep city infrastructure improvements on pace into the next decade by city officials addressing the Fix My Streets Financing Working Group, a task force of residents and experts convened by Mayor Mitch Landrieu to come up with ways to fund a nearly $10 billion overhaul of the city’s streets and other infrastructure.

Cedric Grant, executive director of the Sewerage & Water Board and Landrieu’s point man on all capital projects, said the revenue proposals are needed to complete and maintain street work that will get a boost from a recent FEMA settlement.

On the one hand, the picture looks good for the future funding of the roadways themselves, with about $200 million in roadwork planned for this year.

FEMA announced last month it had agreed to boost the amount it would pay the city for damage to sewer, water and drainage lines after Hurricane Katrina by $1.2 billion, and that money also will go toward reconstructing the streets that lie above those pipes. That money is expected to carry the city’s road projects through the early 2020s, Grant said.

By then, the city will have paid off previous bonds for infrastructure work, freeing up about $32 million a year in tax revenue for additional projects, he said.

But all of that money will cover only a portion of the roughly $9.3 billion needed to completely reconstruct the city’s street grid.

Officials are also expecting a bill for the city’s share of the massive Southeast Louisiana Urban Drainage Project, being built by the U.S. Army Corps of Engineers to improve the region’s ability to deal with rainwater. When construction is completed in 2019, the city will owe about 35 percent of the cost of that work, though the exact amount has yet to be determined. The city also will be on the hook for maintenance costs associated with that project and other drainage efforts throughout the region.

The 4.46-mill drainage tax expiring at the end of the year brings in about $16.1 million a year, or 31 percent of the money brought in by three property taxes dedicated to drainage.

The tax amounts to about $33.45 a year for the owner of a house with a homestead exemption worth $150,000, $78.05 for the owner of a property worth $250,000 and $122.65 for the owner of a property worth $350,000.

The renewal is expected to be on a fall ballot. That will come after a spring ballot when voters will decide whether to allow the city to renew about $120 million in bonds for streets work and whether to approve a 7.5-mill tax increase that officials say would generate $26.6 million for the police and fire departments. The new millage would largely go toward hiring additional police officers, shoring up firefighters’ pension system and paying a $75 million settlement in firefighters’ suit over back pay.

All this comes less than a year after voters approved a 2.5-mill increase in the millage that funds the city’s library system.

Bureau of Governmental Research President Celeste Coco-Ewing urged members of the task force to review a report the nonpartisan think tank released in November detailing how the use of dedicated funding streams means that while some areas of local government are scrambling, certain well-funded efforts such as the Ernest N. Morial Convention Center are flush.

Some members of the committee said the public might be wary of new and extended taxes if they don’t carry safeguards to ensure subsequent administrations continue to use the money for the purpose for which it was intended.

Some audience members said the city is asking for too much. Alicia Plummer said city agencies shouldn’t be asking for more money in the wake of the FEMA settlement, and that they aren’t “coming to the people for money because of need; they come to the people because they can.”

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