On the Ballot

On New Orleans tax propositions, BGR says yes for library and no for housing

By Ben Myers

Source: The Times-Picayune | The New Orleans Advocate

November 22, 2021

A prominent government watchdog group is recommending New Orleans voters renew one expiring property tax on the Dec. 11 ballot but reject another.

In a report published Monday, the Bureau of Government Research supports renewing a 4-mill tax for the New Orleans Public Library that will help the library maintain existing service levels and accomplish goals outlined in a long-term plan, although BGR urged the City Council to levy the tax at a lower rate.

A 0.91-mill tax renewal for housing, on the other hand, is not supported by a clear spending plan, and revenues over the last two years have not been adequately accounted for, according to BGR.

The library and housing taxes are set to expire at the end of this year, along with two others for capital projects and streets. The latter two are not on the Dec. 11 ballot for renewal. The propositions follow Mayor LaToya Cantrell’s failed effort last year to gain voter approval for redirecting library revenue to infrastructure, housing and other priorities.

The administration has said it supports both measures, but declined comment on the BGR report.

The library tax originated in 1986 at 4 mills, but is currently levied at 2.58-mills. It generates nearly $11 million annually, or a little more than half the library’s operating revenue. Most of the remainder comes from a supplemental library tax.

The 4-mill proposition would secure the library tax for another 20 years, allowing for an estimated $17.5 million in revenue, or more than 60% above what the existing tax yields. While the existing tax is limited to funding library operations, the renewal proposition allows proceeds to pay for operations and capital improvements.

BGR noted that the library’s 10-year plan and 2022 budget request relies on existing revenues at the 2.58-mill rate, and cautioned that levying the full 4 mills “could result in an excessive tax.”

“(City Council) should maintain the library’s existing level of tax revenue and consider a request for a rate increase only if the library demonstrates it is necessary,” the report states.

The housing tax, meanwhile, could help address “significant housing affordability problems” that have grown worse during the pandemic, BGR said. But the city “has not developed a plan that shows how it would use the revenue.”

“The lack of a spending plan committing the tax revenue to specific initiatives diminishes accountability,” the report states.

The current tax, which generates about $3.9 million, is split between the Neighborhood Improvement Housing Fund and economic development priorities at the administration’s discretion. The renewal proposition allows funds to be directed only to the housing fund, which goes to homeowner assistance, blight remediation and affordable rental housing.

BGR said Cantrell’s administration did not respond the group’s request for a breakdown of how much of the tax proceeds were dedicated to the housing fund in 2020, and BGR’s review of unaudited financial statements this year show that only $300,000 had been committed to the housing fund this year through September.

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