In The News › OPINION: Higher exemption no real break

Apr 6, 2009

Source: New Orleans CityBusiness

Filed under: Statewide, Taxation & Assessments

OPINION: Higher exemption no real break

OPINION: Higher exemption no real break
New Orleans CityBusiness, April 6, 2009

There are certain things you can count on in the spring in Louisiana — a lovely golden coat of pollen on your automobile, severe thunderstorms to wash it off and a funky smokescreen from state lawmakers in advance of the legislative session.

This year, it’s a familiar fog coming from Baton Rouge in the form of yet another push to raise the homestead exemption. And while the measure is touted as a way of giving taxpayers a break when the economy is putting a pinch on their pocketbooks, in actuality it would likely result in higher taxes unless the public is willing to do without many of the basic services local and state governments provide.

In Louisiana, homeowners are exempt from paying taxes on the first $75,000 of their home’s fair market value. According to the Bureau of Governmental Research, about 42 percent of homes in New Orleans fall under that threshold, 18 percent in Jefferson and St. Tammany parishes, and 69 percent in St. Bernard Parish.

State Sen. John Alario, D-Westwego, is proposing to raise the exemption — something he’s tried unsuccessfully several times in his nearly four decades in the Legislature — to $160,000.

If his fellow lawmakers go along, it will result in roughly two-thirds of homes in New Orleans getting a full break on property taxes other than those paid for police and fire protection. Keep in mind that New Orleans has a dubious history of property assessments, with properties overvalued, undervalued or left off the tax rolls all together.

If Alario’s measure is approved, more than half the houses in St. Tammany and almost three-quarters of the houses in Jefferson have an assessed value under the revised ceiling.

The impact in St. Bernard would be more telling, where of the 9,654 tax-eligible homesteads, only 380 would have to pay property taxes.

One argument put forth in favor of increasing the exemption is that the $75,000 level, unchanged since 1980, doesn’t reflect inflation and no longer gives the break to middle-class taxpayers for whom it was intended to provide tax relief.

The problem with that viewpoint is that the middle class is still likely to carry the burden when local governments and taxing bodies are forced to raise millages to make up for the additional tax-exempt homesteads.

An underlying problem with Alario’s measure — and any other proposal to limit taxes in Louisiana — is that the Jindal administration has yet to make a meaningful attempt to streamline the size of state government.

Until those steps are taken, it will be a challenge to pare back the tax burden from homeowners or anyone else footing the bill for government largesse.•

Apr 6, 2009

Source: New Orleans CityBusiness

Filed under: Statewide, Taxation & Assessments

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