The New Orleans Sewerage & Water Board should consider levying usage fees to pay for the upkeep of its drainage system rather than relying on the property taxes that now fund the system, according to a new report from the Bureau of Governmental Research.
The report by the nonpartisan group says moving to a system that charges property owners fees based broadly on how much runoff from each parcel makes its way into the drainage system could be a way of paying for improvements while discouraging paving that adds more water to the system and ensuring tax-exempt properties pay their share for maintaining the system.
The S&WB is contemplating various ways to fund an additional $54.6 million in costs by 2026, including the local share of the massive Southeast Louisiana Urban Flood Control Project. That would increase its total stormwater budget by more than 42 percent.
Fees could help provide some of that money and potentially do so in a way that is fairer than property taxes alone, while having beneficial side effects, according to the BGR report.
But moving to fees rather than property taxes could be difficult. Two efforts to impose stormwater fees have been shot down in the last 30 years, and a lack of clarity in the City Charter makes it unclear what it would take to impose a fee now.
“It makes sense that in one of the most challenging stormwater management environments among major U.S. cities, decision-makers would give the mechanism consideration once again,” according to the report. “Indeed, the S&WB is currently looking at new funding options, including revenue generated by fees, to meet the stormwater management system’s existing and emerging needs.”
The S&WB is responsible for operating and maintaining the major drainage systems in New Orleans. Unlike its water and sewer operations, that system is funded entirely through property taxes, not user fees.
But the report suggests imposing fees that would be unconnected to the value of a property. Instead, those fees could be determined in a variety of ways including assessing a flat fee on each parcel, basing it on the size or use of a property or using more elaborate methods that would take into account how much water is draining off the property and into the stormwater system.
That last approach could discourage paving and the use of other impermeable materials that end up adding more water that must be pumped out of the city through the drainage system, according to the report.
That result would be broadly in keeping with various initiatives, such as the Living With Water plan, that call for the city to allow more rainwater to seep into the city’s soil in order to combat subsidence and reduce strain on the system.
Such a plan would likely face opposition from nonprofits, universities and others that are exempt from property taxes but would be subject to the new fees. In addition, the report notes that state law and the charter are unclear on exactly how such a fee would be imposed and whether it would require a vote of the people.