In The News › Watchdog group endorses New Orleans fire and drainage taxes on December ballot

Watchdog group endorses New Orleans fire and drainage taxes on December ballot

By Jeff Adelson

The Advocate

November 15, 2016

A leading government watchdog group is supporting two property tax measures on the Dec. 10 ballot in New Orleans, a new tax designed to pay for a settlement between the city and firefighters and a tax renewal to pay for drainage.

The nonpartisan Bureau of Governmental Research gave both taxes the thumbs up in a report issued Tuesday.

The BGR report characterizes the tax as an important way to meet the obligations of the settlement between the city and the firefighters. It would cover $5 million a year in back pay the city owes and offset some of the costs of firefighters’ pensions, which have increased from $27 million in 2009 to $43.2 million this year.

The fire tax is assessed on the full value of a property, including the first $75,000 for owner-occupied homes that is normally protected from taxation by the homestead exemption.

If the tax is passed, residential properties would pay an additional $25 a year in taxes for every $100,000 in value; commercial properties would pay an additional $35 for every $100,000 in value.

The BGR report also recommends voters approve the renewal of a drainage tax for the Sewerage & Water Board.

“The drainage system is among the most critical components of New Orleans’ infrastructure, and the property tax is vital to the maintenance of that system,” according to the report.

The drainage tax is one of three taxes that fund the S&WB’s operations of the drainage system’s pipes, canals and pumps. The 4.666-mill tax brought in about $16.1 million this year, but the renewal is set to lower the tax to 4.46 mills.
That rate amounts to about $122 a year on the tax bill of a homestead-exempt property worth $350,000.

“Renewing the property tax would essentially maintain the status quo,” according to the BGR report. “The drainage system’s dedicated revenue would continue uninterrupted, allowing the S&WB to maintain its current level of drainage operations. S&WB officials say that renewal of the property tax is critical because dedicated tax revenue for the drainage system is fully absorbed by current expenses and required operating reserves.”

Should the tax fail, the S&WB would lose about a third of its drainage funding, and a “system that S&WB says is already underfunded would be in a worse position,” according to the report. “The drainage system would begin consuming cash on hand to meet operating costs and debt service, but it would run out of money in 2020.”

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