In The News › Council orders property review

Feb 14, 2009

Source: Times Picayune

Filed under: Taxation & Assessments

Council orders property review

Council orders property review
Tax-exempt land, buildings targeted
Saturday, February 14, 2009
By Bruce Eggler, Staff writer

Wading knee-deep into troubled waters, the New Orleans City Council has called on the city’s seven assessors to take a new look at land and buildings exempted from paying property taxes because they are owned by nonprofit organizations such as schools or churches.

At its most recent meeting, the council passed a resolution urging the assessors to make sure that nonprofit tax exemptions meet all the requirements set forth in the state Constitution, including that the property is not “used for commercial purposes unrelated to the exempt purposes of the corporation or association.”

The resolution, introduced by Councilwoman Stacy Head, was approved 6-0, with Councilman James Carter absent.

Head said she suspects many tax-exempt properties should go back on the tax rolls because the churches or other nonprofits listed as their owners no longer are in operation.

The resolution also asks the assessors to “reassess properties prior to summer 2009 to ensure that assessments are aligned with actual property values, aiding the city’s recovery efforts” by making sure that properties whose valuations were reduced after Hurricane Katrina but that have since been renovated and put back into commerce are again paying appropriate taxes.

The resolution pledges that the council will reduce millage rates as the net assessed value of all property in the city rises.

Proposals to reduce the amount of property exempt from property taxes because it is owned by nonprofits have stirred controversy for years.

A 1996 study by the Bureau of Governmental Research found there was $502 million worth of tax-exempt private property in New Orleans owned by churches, private universities, private and parochial schools, hospitals, social service agencies, fraternal organizations, labor unions, Carnival krewes and other nonprofit organizations.

The study did not estimate how much of the $502 million of nonprofit property was being used for commercial purposes and thus might be taxable, but it suggested the percentage could be considerable.

The city’s assessors, led by Tom Arnold and Erroll Williams, tried in the 1990s to get some such properties added to the tax rolls, but that usually led to a court fight with the owner or tenant, and the courts generally ruled in favor of the nonprofits and against attempts to tax their land or buildings.

In 1999, Mayor Marc Morial promised an increased effort to levy taxes on revenue-producing properties owned by nonprofit groups, such as apartment houses and commercial buildings that in many cases operate nearly the same as taxable buildings owned by for-profit companies or individuals. Little came of the effort, however.

In other actions at its Feb. 5 meeting, also by 6-0 votes with Carter absent, the council:

— Approved adding five public libraries to the list of recovery projects where the “design-build” procedure will be used to expedite construction. Under the procedure, normally prohibited for public agencies but authorized by the Legislature to speed post-Katrina rebuilding in a few hard-hit parishes, agencies can solicit bids for designing and constructing a project at the same time instead of conducting two separate rounds of bidding. The chosen contractor can begin site work before the design of the new building is complete.

An ordinance passed in July authorized use of the procedure for 19 projects, including several criminal justice buildings, police stations and fire stations. The latest action adds the Algiers Regional, New Orleans East Regional, Nora Navra, Norman Mayer and Smith libraries to the list. All are being demolished and rebuilt.

— Hired the local firm of Bruno & Tervalon to perform the city’s “single audit,” or audit of how federal grants are spent, and the firm of Duplantier, Hrapmann, Hogan & Maher to perform audits of the Municipal Employees Retirement System and the fire and police pension funds for fiscal years 2008 through 2012.

Postlethwaite & Netterville handles the city’s main annual audit. Postlethwaite, a Baton Rouge-based firm with a large New Orleans office, was the only accounting firm to respond to the city’s request for proposals a year ago.

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Bruce Eggler can be reached at or 504.826.3320.

Feb 14, 2009

Source: Times Picayune

Filed under: Taxation & Assessments

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