City accused of misleading the public in campaign for property tax proposal
By Michael Isaac Stein
Source: The Lens
November 23, 2020
In recent weeks, New Orleans Mayor LaToya Cantrell has ramped up her campaign to convince voters to approve a plan to reallocate millions of dollars in property taxes, which will appear as three separate ballot propositions on the Dec. 5 ballot. But as Cantrell takes her pitch to the public, several library employees, a library manager, a library board member and a coalition of local nonprofits and unions have accused the city and top library officials of being intentionally misleading.
Indeed, Cantrell herself has repeatedly made false public statements about the tax proposal over the last month.
“It’s a basic misinformation campaign to try and shove this millage through and dupe the voters,” Library board member Andrea Neighbours told The Lens.
What the propositions do:
Proposition 1: Would combine and increase two existing property taxes for capital improvements and streets and traffic signals into one tax dedicated to streets, drainage, facility maintenance, vehicles and equipment.
Proposition 2: Would reduce an existing property tax dedicated to public libraries and expand permissible uses of the money to include both libraries and early childhood education. The city has said it wants to dedicate $1.5 million for early childhood education in 2021 and that the City Council would ultimately determine that allocation.
Proposition 3: Would break up an existing property tax dedicated to housing and economic development into two separate taxes, one for economic development and another for housing and blight alleviation. The combined rate of the two new property taxes would be more than double the property tax they replace.
The tax package, if passed in full, would not raise residents’ overall property tax bills. It takes four property taxes currently set at a combined rate of 5.82 mills — one mill levies one dollar in property taxes for every $1,000 in assessed property value — and creates three new property taxes set at the same combined rate of 5.82 mills.
But it would change how the money is spent. The proposal would strip about 40 percent of the library’s roughly $20 million annual property tax revenues, shifting those funds to housing, infrastructure maintenance, economic development and early childhood education. The new tax rates would last for the next 20 years.
From the start, the Cantrell administration has claimed the library system wouldn’t be harmed by a 40 percent budget reduction, and that the resulting system could be better and even expand their services from what exists now. But the administration has stopped well short of providing a comprehensive plan for how that is possible.
Administration officials have discussed plans for a larger “paradigm shift” to start embedding other city departments within library buildings. The city has already started a pilot program to embed the Office of Business and External Services within the Rosa Keller Library in Broadmoor. This, officials have said, could help fill in library funding gaps by routing money from other departments. The long-term vision for the library, however, is still unclear.
Ultimately, critics claim that it is difficult for the public to understand what future they’re really voting for. Cantrell’s office did not respond to questions or multiple requests for comment for this story.
‘It misrepresents the true story about what this means for the library’
In a flurry of recent press conferences and media interviews, Cantrell has disseminated false information about the property tax proposal. For example, Cantrell has said on numerous occasions that the proposal would lower the city’s property tax rate. At a press conference last week to promote the tax proposal, she said that it “will reduce taxes.” The city’s website, meanwhile, says that “this proposal would reduce taxpayers’ property tax bill in 2021.”
But that isn’t true. Cantrell’s plan wouldn’t change the overall tax rate at all.
And in an interview on WBOK last week, Cantrell defended the proposed library cuts by saying that the library had “spent only half of their budget for the past five years.” That also is not true.
Meanwhile, Cantrell’s political action committee Action New Orleans said on its website and in a tweet that the proposal would result in the city providing funding for early childhood education “for the first time ever.” That isn’t true. The city of New Orleans has allocated money to early childhood education since 2018.
In a response to questions from The Lens, Action New Orleans spokeswoman Kristine Breithaupt said that the website had been changed and corrected. The inaccurate tweet had not been deleted by the time this story was published. The website now says that the proposal will create New Orleans’ first “dedicated funding” for early childhood education.
But it’s unclear if that is true, either. Proposition 2 — the library and early childhood proposition — doesn’t specifically dedicate any tax proceeds to early childhood education.
Proposition 2 reduces the library millage and expands the permissible use of the tax to include “maintaining and operating public libraries and early childhood education facilities and related programs in the City.” The city says it plans to use $1.5 million of that for early childhood education, but the City Council will ultimately decide how the money is allocated.
Should the proposal pass, the Cantrell administration has declared its intention to ask the City Council to pass an ordinance that would allocate $1.5 million to early childhood education from the tax next year. There’s no guarantee the council will approve that ordinance. And future years are even less certain.
“That’s up to the whim of whatever council comes along,” Neighbours said. “Who knows? Nothing’s guaranteed. On that basis alone it should be rejected.”
But aside from the technically inaccurate statements, library workers, board members and critics are taking issue with what they say is a broader campaign to to paint a misleading picture of the actual impacts the tax change would have, even when it stays within the bounds of technical accuracy.
“It misrepresents the true story about what this means for the library,” Neighbours told The Lens.
She argued that along with downplaying the hit to the library, the city was overstating the plan’s positive impact on early childhood education. This year, the city spent $3 million to fund 200 seats in early childhood education programs. If the proposal passes and the council approves the $1.5 million allocation, that will remain the same. If it fails, that number would be cut in half. So for next year, the tax proposal would help maintain, rather than expand, funding for early childhood education in the city.
Neighbours argued at a recent board meeting that the plan wasn’t worth it, since early childhood education was only gaining $1 for every $5 the library was losing. The library, she argued, is a vital partner in early childhood education.
“This idea that it is a win for early childhood is laughable,” she told The Lens. “It’s a downright lie and propaganda in that it’s such a little gain for early childhood education. … To do the math and say early childhood is going to gain is just disingenuous because with a 40 percent cut [to the library], inevitably kids, especially those who have the least, are gonna lose.”
The Cantrell administration has used city resources, including the city’s official Twitter account and official press releases, to explicitly urge people to approve the millage proposals or tout their “benefits.” Using public resources to urge voters to approve or reject a ballot proposition is prohibited under state law. The city’s official Twitter account recently deleted a tweet it sent last week encouraging residents to “Vote for Early Childcare.”
Library employees who spoke with The Lens were particularly incensed at the material coming from the library system itself.
Last week, the library sent a fact sheet on the tax proposal to all library branches to hand out to people who inquired. Neighbours, along with four library employees who spoke with The Lens on the condition of anonymity, were not pleased.
“I’m absolutely offended that the library would put out this information,” Neighbours said.
Her biggest issue was with a section of the fact sheet that described what would happen to the library if the proposal was approved or rejected by voters.
From the perspective of the critics, the library would see an immediate 40 percent cut if the proposal passes — one that would last 20 years — but would be able to keep its current funding for at least another year if it fails. The library fact sheet, on the other hand, emphasizes that the library budget will be cut if Proposition 2 fails.
If the changes are approved, the sheet says, “the Library will: Continue fulfilling its mission of transforming lives, enriching neighborhoods, and preserving history by offering safe and welcoming spaces and providing free, educational, informational, and recreational resources, programs, and activities for all ages.”
The fact sheet says that if the proposal fails, “the Library will: face a 50% funding cut resulting in the possibility of reduced locations, operating hours, and significantly decreased collections, programs, and technology budgets.”
Nowhere on the sheet does it mention that the proposal’s success would result in a dramatic budget reduction for the library. The current library millage expires at the end of next year, and if it were allowed to expire without a replacement, the library would lose about half of its tax revenues. But the sheet ignores the fact that even if this year’s proposition fails, the city has an entire year to come up with a replacement and place it before voters in 2021.
“We have been given Xeroxed handouts to offer to patrons if they ask,” one library worker told The Lens who spoke on the condition of anonymity for fear of retribution. “The problem is that they are grossly misleading, mentioning a large cut from a no vote, but completely omitting the equally as bad, and more importantly irreversible, twenty year cut voting yes will lead to.”
That same information was also sent out to Library patrons through the library’s email system. The email caught the eye of the Save Your NOLA Library Coalition, which formed specifically to oppose the tax proposal.
“Yesterday, patrons of the New Orleans Public Library received an email containing inaccurate and misleading information about the upcoming December ballot measures,” said a recent press release from the Save Your NOLA Library Coalition. “This is only the latest turn in the ongoing use of official channels to promote a political agenda. In addition to likely violating ethics laws by promoting a political campaign, it is plainly unethical for a public library to distribute inaccurate information to voters.”
Cantrell has made similar claims on her own, indicating that failure to pass her tax plan would result in an immediate budget shortfall for the city.
“The millage package will be going to voters December 5. It is baked into the 2021 budget, that’s a $23 million to $25 million gap that we will have to close if voters do not approve,” Cantrell said in a video produced by the city and released on the city’s Youtube and Facebook pages.
The city would not lose out on $23 million next year if the proposal fails.
Cantrell’s plan involves four separate property taxes that all expire at the end of 2021. That means that if Cantrell’s plan fails, the taxes won’t immediately disappear. They will all last for another year until the end of 2021. The risk of losing $23 million doesn’t come until 2022.
In an email obtained by The Lens, one library branch manager told an employee that they were hesitant to put out the fact sheet, saying “I agree that it’s a lie through omission to not mention that our current millage does not expire until the end of 2021.”
Opponents of Cantrell’s plan want voters to reject the plan and go back to the drawing table to pass a better tax renewal next year. That’s the same advice that was given by the Bureau of Governmental Research, a local nonpartisan think tank, in a recent report it released opposing Cantrell’s plan.
It’s also unclear whether the adjusted property taxes were “baked into the 2021 budget,” as Cantrell has claimed on numerous occasions. The City Council approved the city’s 2021 budget last week. The budget ordinances appear to be based on the existing property tax rates, not the new proposed rates.
Since the Cantrell administration first released its plan, it has claimed that the 40 percent cut to the library budget would come “without detriment” to the library system. At an August council meeting, Cantrell’s Chief Administrative Officer Gilbert Montaño repeatedly assured council members that from the perspective of a library patron, nothing would change.
“There will be no layoffs, no services removed, no people laid off, no hours cut, none of that is going to happen as a result of this, correct?” Councilman Jay Banks asked.
“That is correct,” Montaño responded.
The administration’s justification for this claim is that the library is currently getting more money than it actually needs.
The Library is primarily funded by two dedicated property taxes. The first one expires in 2021 and is part of Cantrell’s proposal. New Orleans voters overwhelmingly approved the second tax in 2015, and it will not expire until 2040.
But at times, the administration has exaggerated the level of annual surpluses the library has collected.
“Let me tell you the facts: Libraries have spent only half of their budget for the past five years,” Cantrell said in an interview on WBOK last week.
That isn’t true. In his August presentation, Montaño said the Library had underspent its budget by 11 percent on average for the last four years. But even that doesn’t tell the full story.
In 2018 and 2019, the Library spent 98 percent and 97 percent of its collected property tax revenues, according to Montaño’s presentation, meaning surpluses of two and three percent. The 11 percent average is driven up by the years 2016 and 2017, when the library carried large surpluses around 20 percent.
But library board members and workers say that the large surpluses in 2016 and 2017 can be explained by the new dedicated property tax that took effect in 2016. From 2015 to 2016, the library’s budget nearly doubled. In the following four years, property values around the city have skyrocketed, meaning more money coming to the library.
It took time, board members have said, to ramp up spending and programming to match their new budget. In September, Library board member James Chassee questioned whether the administration was taking “a convenient approach” by looking at their average expenditures over four years rather than its current budget.
He said that whether or not the library should have ramped up its spending faster, the library had since opened new branches and expanded services. The current library budget pretty closely matches its revenue collections, he argued.
“I think it’s a mistake to take an average of the last four years because we’ve grown significantly over the course of that time,” he said.
In the 2021 budget the council passed last week, the Library is budgeted for nearly $21 million in expenditures, which lines up exactly to match their expected revenues. That budget was created under the assumption that the current tax rate continues next year. Chassee noted that from a planning perspective, the library would have to make cuts based on that $21 million budget, not on the average budget over the last five years.
Nonetheless, Cantrell has stuck to her guns, claiming that the city is simply “right sizing” the library budget.
“It is a win-win,” she said on WBOK. “I see no one losing here.”
But that goes against earlier statements from New Orleans Public Library Director Gabriel Morley. In August, Morley held a conference call with library staff to announce the “bad news” of the Mayor’s tax plan.
“It’s a no-win situation for us obviously,” he said. “Clearly, the library will not be able to operate at its current level with a 40 to 50 percent budget cut.”
Cantrell repeated similar “right-sizing” arguments at a press conference last week.
“They’re allocated more than what they spend,” she said. “We are, again, aligning the budget with current expenditures of the library so no, nothing will go away.”
When The Lens pointed out that the Library had spent 98 percent and 97 percent of its tax revenues in 2018 and 2019 at the press conference, Cantrell said, “That’s inaccurate. It’s not true.” When The Lens pointed out that those numbers came from the administration itself, Cantrell said that even though the surplus was smaller, there still was a surplus. She then again claimed that the library tax collections from her proposal, roughly $13 million a year, would be enough to meet the $21 million in expenditures the Library has budgeted for.
“It will be a decrease, but there will be no decrease in their expenditures right now,” she said. “We’re factoring how they spend their money. That will not change.”
Emily Wolff, the director of the city’s Office of Youth and Families, who also appeared at the press conference, said that the library could use its reserve funds to fill in gaps for the next two or three years. In that time, she said, the library could reduce its spending by finding new efficiencies.
“If the library wanted to maintain its expenditures over the next two, three years, they could, with the reduction in revenue coming from the millage, if they wanted to change nothing, they could use that fund balance to make up that difference,” Wolff said. “Over time, what the library director laid out is how to increase efficiencies across the board.”
Some doubt that operational efficiencies were enough to make up for a 40 percent revenue cut. In a recent editorial, The Times-Picayune/New Orleans Advocate came out against the mayor’s proposal, in part because of a lack of a clear plan for the library to adjust to its new, smaller budget.
“We support rightsizing, yet the idea that such a severe drop in revenue wouldn’t impact services strains credulity. That the system has built up a reserve is commendable, but not good enough reason to raid it.”
A library employee told The Lens that the administration’s opaque vision for the library’s future had taken a big morale hit among staff.
“Everyone feels led to the gallows without an honest explanation of any goals and plans, just empty buzzwords and dubious promises.”
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