In The News › New Orleans school property tax would raise $15.5 million for building maintenance

New Orleans school property tax would raise $15.5 million for building maintenance

By Danielle Dreilinger

NOLA.com | The Times-Picayune

November 21, 2014

Before Hurricane Katrina, New Orleans’ public school buildings were in terrible shape. Roofs needed to be replaced, boilers repaired, windows caulked. In some cases, the work was decades behind schedule.

That problem has been solved – temporarily. Thanks to $1.8 billion, mostly from the Federal Emergency Management Agency, the city is in the midst of an unprecedented school rebuilding plan.

But the FEMA money doesn’t cover future maintenance and repairs, and many people are concerned the new buildings will crumble just like the old ones did. That’s why a coalition of education advocates brought forward a measure that will be on the Dec. 6 ballot.

Orleans Parish voters will decide whether to renew an existing 4.97-mill property tax and to redirect it to school building maintenance. The current tax goes to pay off pre-Katrina school construction bonds. They expire in 2021.

A yes vote would extend the tax through 2025 for “the purpose of preservation, improvement and capital repairs of all existing public school facilities.” A no vote would mean voters pay less and less in taxes as the pre-Katrina bonds are paid off, going down to nothing in 2021.

This tax now generates $15.5 million per year. It costs $62.13 for the owner-occupant of a $200,000 house if they have a homestead exemption, with an extra $49.70 per $100,000 value over that, according to the Bureau of Governmental Research. Commercial property owners pay $69.58 per $100,000 of property value.

The way the tax money is spent was determined by the Legislature this spring. Act 543, sponsored by state Rep. Walt Leger, D-New Orleans, passed with no objections. The law says:

From 2015 to 2021, a gradually increasing share of the revenue will cover emergency building repairs. It also will cover administration costs for two offices, one for the state Recovery School District and one for the Orleans Parish school system. The administration costs will be capped at $600,000 per year, or $15 per student.

After that, there will be two revolving loan funds – one per school system – plus a separate account for each of the city’s 80-plus public school buildings. Newer schools will get about $500 per student per year. Older ones will get about $650. Each school will be able to choose how it uses the money, under rules set by the state and parish.

If the tax is not renewed and rededicated, all these structures – the offices, loan funds and building accounts – will still be set up; they’ll just have less money. Act 543 redirected part of the city’s sales tax to this purpose, and did not need voter approval. That sales tax revenue will run to $6.4 million in 2016, increasing to $8.6 million by 2021, according to the Bureau of Governmental Research.

The property and sales tax would still cover only part of the total cost of maintaining school buildings. The annual repair budget should be more than $40 million, according to a 2013 report from Tulane’s Cowen Institute.

Controversy: The Recovery School District oversees 57 of the city’s 83 public schools. The Orleans Parish school system runs six schools and oversees 14 charters.

Some residents and politicians want the Recovery system to leave town and return the schools to local control. And they say that because Act 543 directs tax money to Recovery administrators and charters, it in effect means the state system will continue to exist in New Orleans through 2025.

Supporters of the tax proposal say Act 543 can be amended. Successful Recovery charters may choose to return to the local school system; if they do, the facilities dollars will follow them.

Timing: The current tax does not expire until 2021. School Board members Cynthia Cade and Leslie Ellison, among other opponents of the measure, say it’s better to take a year or two to rewrite Act 543 before reauthorizing the tax. Supporters say the emergency repairs fund should start as soon as possible.

Endorsements: The editorial boards of NOLA.com | The Times-Picayune, Gambit and The New Orleans Advocate support the measure. So do the Bureau of Governmental Research, Stand for Children, the Urban League of Greater New Orleans, Orleans Public Education Network and the New Orleans Business Council. The New Orleans Tribune opposes it, as does Justice & Beyond and the John McDonogh Steering Committee.

Here’s the text of the measure:

Shall the Orleans Parish School Board (the “School Board”) levy a tax of four and ninety-seven hundredths (4.97) mills on the dollar of the assessed valuation of property within the City of New Orleans assessed for City Taxation, (an estimated $15,540,000 reasonably expected at this time to be collected from the levy of the tax for an entire year), for a period of ten (10) years, beginning in 2015, for the purpose of preservation, improvement and capital repairs of all existing public school facilities, to be levied and collected in the same manner as is set forth in Article VIII, Section 13©(Second) of the Louisiana Constitution of 1974; provided that said tax is to be levied each calendar year at a millage rate not in excess of the difference between 4.97 mills and any millage levied in such calendar year for any outstanding general obligation bonds of the School Board?

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