In The News › Tax Fairness Commission has tough task ahead

Dec 14, 2010

Source: CityBusiness

Filed under: Orleans Parish, Taxation & Assessments

Tax Fairness Commission has tough task ahead

Tuesday, December 14, 2010
By Ben Myers
CityBusiness

Mayor Mitch Landrieu’s Tax Fairness Commission has a monumental task and a tight deadline. The 10-member panel must diagnose and suggest a remedy for a problem that New Orleanians know exists but have no data to track: Inequity in the local tax structure.

Preliminary and final reports are due in March and June, respectively, and they are to include every aspect of the city’s tax system.

“They have got a lot of work to do,” Bureau of Governmental Research CEO Janet Howard said. “You are going to have to have some hard numbers, and that’s very difficult to come by.”

For example, the value of tax-exempt properties on today’s tax rolls appears nearly the same as when BGR analyzed them in 1996 because they have not been reassessed, Howard said. At that time, tax-exempt properties in New Orleans were collectively assessed at $1.6 billion, or 65 percent of their total value, according to the BGR analysis.

“You can see that the other assessed values, things they are actually assessing, have gone way up,” Howard said. “You don’t have a true picture by looking at the values on the tax role.”

Landrieu, when announcing the new commission Dec. 9, said he has asked the panel to specifically examine tax exemptions for nonprofit, educational and other institutions. Although Louisiana’s constitution mandates charitable exemptions, Landrieu said other cities have forged agreements with exempt organizations to pay for their consumption of city services.

As a model, Landrieu pointed to Massachusetts, where 82 municipalities have Payments in Lieu of Taxes, or PILOT, programs. They are a trendy alternative to property taxes, according to the Cambridge, Mass.-based Lincoln Institute of Land Policy. Elsewhere, 35 municipalities in 18 states have such programs, although their merits are up for debate.

Landrieu did not specifically discuss PILOT programs when discussing the tax commission, but his transition task force on city finances recommended adopting a PILOT program for tax-exempt properties within six months of his inauguration in May.

“I have had a number of conversations with folks that run not-for-profits, that run universities, and have said that ‘Listen, what we have in New Orleans doesn’t seem to work,’” Landrieu said.

Beverly Nichols, a New Orleans resident and partner with Bourgeois Bennett, a Metairie accounting firm, said the commission’s charge should include the entire “administrative system” in city government, beyond the tax structure specifically. For example, she said, small businesses are frustrated by incoherent fee, permitting and licensing systems, a topic discussed at length at the City Council’s recent budget hearings.

That issue intertwines with lax collection of sales taxes, which the administration is planning to improve with additional employees in its Finance Department. The administration also plans to unveil a “one-stop shop” streamlining service for businesses.

But Nicholls questions whether the commission will have the time and resources to make holistic recommendations.

“I suppose as they start investigating what is our current tax system structure that they will encounter a lot of those other areas,” Nichols said. “But I don’t know they are being charged to do anything with that.”

Dec 14, 2010

Source: CityBusiness

Filed under: Orleans Parish, Taxation & Assessments

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