In The News › ‘Yes’ on firefighter and drainage taxes for New Orleans: Editorial

‘Yes’ on firefighter and drainage taxes for New Orleans: Editorial

By The Editorial Board

NOLA.com | The Times-Picayune

November 20, 2016

The Times-Picayune editorial board makes the following recommendations for the Dec. 10 ballot:

ORLEANS PARISH

FIRE PROTECTION PROPOSITION

To increase property taxes by 2.5 mills for 12 years for fire protection services

Yes

The city of New Orleans signed an agreement in March to pay firefighters $75 million to cover decades of back pay for state-mandated raises they never received. Mayor Mitch Landrieu’s administration also agreed to put about $12 million extra per year into the firefighters’ struggling pension system. This tax would help pay for those important obligations.

The dispute over back pay festered during several mayoral administrations before the Landrieu administration and the firefighters’ union reached this settlement a year ago. For years the city refused to pay state-mandated 2 percent “longevity” raises to veteran firefighters. Courts ultimately found that the city owed back pay from 1990 to 2006, when the Nagin administration implemented the raises going forward.

Mayor Landrieu inherited the debt when he took office in 2010 and worked out the agreement signed in March. The city promised to give firefighters $15 million from the general fund in 2016, which it has done, and pay off the rest in $5 million annual installments if the tax passes. As part of the negotiations, Mayor Landrieu got firefighters to agree to pension reforms that he expects to produce long-term savings for the city. Legislators approved the pension changes this year, including raising the retirement age for newly hired firefighters and reducing the rate at which firefighters accrue benefits. The settlement agreement also requires the pension board to make some reforms in how it invests money and how benefits are paid. Those changes are crucial. The city is on the hook for $43.2 million this year for firefighter pensions — a 60 percent increase since 2009, according to the Bureau of Governmental Research. The costs ballooned in part because of bad investment decisions by previous board members.

Mayor Landrieu initially combined the firefighter tax with a tax increase to pay for hiring police officers, but voters rejected the combined tax in April. This is the second try to get voter approval. Without this tax, firefighters and their families who already have been waiting decades to be paid likely would have to wait longer. The Landrieu administration has met the initial terms of the agreement with the $15 million payment this year, and the city could wait to make further payments until 2019, BGR said. Those payments could be smaller as well and spread out over a much longer period of time. Without the tax, the city also might have to take money from other services to make payments agreed to in the settlement.

BGR, which is supporting the tax increase, points out that the tax will be needed for a relatively short period — 12 years.

It is long past time for the city to pay firefighters what they are owed, and the best way to do that is with this tax.

SEWERAGE & WATER BOARD DRAINAGE TAX

To renew 4.46 mills of property tax for New Orleans’ drainage system

Yes

This tax is essential to operating the city’s aging drainage system. Property taxes account for the vast majority of the budget for drainage, and this millage provides 28 percent of that revenue, the Bureau of Governmental Research said in its analysis.

Renewing the tax essentially would allow the agency to continue its current level of service.

The Sewerage & Water Board already lacks money for its capital improvement program, and the agency soon will be on the hook for additional expenses, according to BGR. First, the S&WB will have to take over operational costs for the three outfall canals and pumping complexes on Lake Pontchartrain when the Army Corps of Engineers completes them. That is expected to be in 2017. Then starting in 2019, the S&WB will be responsible for a share of the costs of the corps’ drainage improvement projects under the Southeast Louisiana Urban Flood Control Project.

BGR, which is supporting the tax renewal, points out that Inspector General Ed Quatrevaux’s office has criticized the S&WB in the past year for problems with the collection of sanitation fees, the management of take-home cars and a lack of documentation for reimbursements. S&WB officials said the issues with the cars and reimbursements have been corrected. The agency’s updated billing system is expected to improve collections. S&WB also has changed its board structure to limit board members’ involvement in contracts and other reforms recommended by BGR. It is vital to continue those efforts.

Few cities, though, have to deal with as much water as New Orleans does. A working drainage system is crucial, and the S&WB needs this revenue to provide that.

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