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Why will New Orleans property owners get another tax bill this year?

By Greg LaRose

NOLA.com | The Times-Picayune

February 1, 2017

Tuesday (Jan. 31) was the deadline for New Orleans property owners to pay their 2017 taxes, but they can expect another bill in the coming months.

The reason: Voters on Dec. 10 approved a new property tax millage for fire protection and renewed tax dedicated to drainage projects. The City Council approved the collection of those millages last week, and the city will send out supplemental property tax bills in the spring.

The fire protect tax increases property taxes by 2.5 mills for the next 12 years. The homestead exemption doesn’t apply to this tax, meaning all property owners will pay it. The owner of a $350,000 home would pay an additional $87.50 in taxes each year — and another $25 for every additional $100,000 in home value. Commercial property owners would pay $35 for every $100,000 in value.

The tax is expected to generate almost $9 million annually, and the money will go toward satisfying a settlement Mayor Mitch Landrieu reached last year with city firefighters to pay $75 million in overdue back pay. The city has already paid off $15 million of that obligation, and the mayor promised to pay $5 million if voters approved the tax.

The tax also allows the city to continue to replenish the firefighters’ pension fund. As part of the settlement, firefighters agreed to overhaul their retirement system which had been depleted as the result of bad investment decisions. The city is paid more than $43 million into the pension fund in 2016.

The drainage renewal involves 4.46 mills of property tax for New Orleans’ drainage system. This millage provides 28 percent of the revenue the Sewerage and Water Board uses for system upkeep, according to the Bureau of Governmental Research. The tax will allow the utility to continue at its current pace of drainage projects, but city officials have warned considerable new expenses are excpected once the Sewerage and Water Board takes over control and maintenance of the city’s three east bank outfall canals and pumping stations.

The December renewal will actually lower property tax bills slightly. Voters reduced the 4.66 millage to 4.46, resulting in about $690,000 less being collected annually. When taking into account the total drainage tax bill, a homeowner claiming a homestead exemption on a $350,000 property would pay $446 a year, or $6 less than last year. Commercial property owners would pay $62 per $100,000 in value, down from $65. When considering just the millage renewal, the household impact will be $122 for the year.

The drainage upkeep tax has been collected since 1967 and was projected to generate $16.1 in 2016.

For questions about property tax payments, call the Bureau of the Treasury at 888.387-8027.

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