The Bureau of Governmental Research (BGR) won three awards at the national Governmental Research Association conference July 13-16 in Providence, R.I.
BGR was honored for Outstanding Policy Achievement for its efforts to encourage the City of New Orleans to meet the criteria for issuing $468 million in tax-exempt municipal bonds as opposed to taxable bonds, which carry higher interest rates. This change will save New Orleans property taxpayers an estimated $88.5 million over the bonds’ 30-year lifespan.
While conducting research for a report on the City’s budget, BGR discovered that the City had lost the certification to issue tax-exempt bonds because of its delays in spending bond proceeds. The Internal Revenue Service requires municipalities to spend 85% of the money within three years for the bonds to qualify as tax-exempt. The City repeatedly failed to meet this requirement and had begun issuing more costly taxable bonds.
BGR’s research showed that the City’s problems with spending bond proceeds in a timely manner began after Hurricane Katrina. The City received federal reimbursement for some capital projects that it had planned to fund with bond proceeds. The City often had difficulty finding other uses for the local money because of spending restrictions in the voter-approved bond propositions.
BGR found that the City had issued $265 million in taxable bonds from 2013 to 2019 at substantial additional cost. For example, $65 million in taxable bonds that the City issued in 2015 will cost taxpayers an additional $9.8 million in interest payments over the 30-year life of the bonds.
BGR sent a May 2019 letter to the mayor and City Council, recommending that the City develop a strategy to qualify for tax-exempt status for future bonds. In response to BGR’s letter, Mayor LaToya Cantrell agreed with BGR’s assessment and said the City would take steps to meet the criteria for tax-exempt bonds.
Later that same year, BGR reinforced its recommendations in an analysis of a November 2019 ballot proposition authorizing the City to issue $500 million in new bonds. BGR supported the proposition but said the City should not issue bonds until it qualified for tax-exempt status.
After voters approved the proposition, the City administration waited to begin selling the bonds until its bond counsel certified that the City met the criteria for issuing tax-exempt bonds. The City sold the bonds in two segments in September 2021 and August 2024. Of the total $500 million issued, $468 million received tax-exempt status (the remainder was for affordable housing projects that did not qualify for the exemption). The Board of Liquidation, City Debt, told BGR the tax-exempt bonds will save the City and taxpayers an estimated total of $88.5 million in interest costs over 30 years.
Controlling interest costs is particularly important to a city like New Orleans that has vast infrastructure needs that will likely require substantial funding from bonds to address. Lower interest rates make the City’s bond financing go further. Indeed, the City plans to seek voter approval this fall for $500 million in new bond authority. City administrators said most of those bonds would be tax-exempt.
In addition, BGR received two other GRA awards:
- A Certificate of Merit for Most Effective Education honored the report, How Has ‘Fair Share’ Fared? The Impact of the 2019 Deal to Increase Tourism Taxes for New Orleans Infrastructure. This report informed the public about the implementation and outcomes of new tourism taxes to address long-neglected maintenance of streets, drainage and other infrastructure in New Orleans. The report found that the deal is largely fulfilling its promise of providing substantial funding for local infrastructure at no cost to residents. BGR made recommendations that policymakers have implemented to improve the deal’s effectiveness and transparency.
- A Certificate of Merit for Best Short-Form Writing was awarded for a BGR NOW entitled Jailbreak Should Spur Sheriff and City to Tackle Jail’s Needs. It recaps BGR’s extensive research findings and recommendations on the Orleans Parish Jail to help channel public outrage over the May 16 jailbreak into collaborative problem-solving of root causes for the jail’s poor performance.
BGR Senior Research Analyst Paul Rioux led the research and drafting of each report honored by the GRA.
“We appreciate the recognition of the hard work of Paul and our entire research team to shine a light on local government issues such as these,” said BGR President and CEO Rebecca Mowbray. “BGR looks forward to new research to enhance governmental transparency and accountability and develop research-backed solutions to important challenges we face.”
The Governmental Research Association was established in 1914 as the national organization for public policy research professionals. It has presented BGR with 54 awards since 1992. These awards have recognized BGR’s distinguished research, effective citizen education, distinguished service, research presentation and policy achievements. This is the 18th consecutive year that the GRA has recognized BGR’s work.
Click here to explore a timeline of the work honored over the years by the GRA.
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BGR is a private, nonprofit, independent research organization. Since its founding in 1932, it has been dedicated to informed public policymaking and the effective use of public resources in the Greater New Orleans area. For more information, call (504) 525-4152 or visit BGR’s website, www.bgr.org.
BGR is a proud member of the Governmental Research Association, the national organization for governmental research professionals. The GRA began in 1914, with the realization that effective policymaking requires good information, not just good intention. The GRA is home to independent organizations providing this information — trusted, objective, non-partisan, and practical research and data to local and state leaders.