Assessing the Assessor Report

Orleans Parish assessor’s budget, methods questioned by nonpartisan research group

By Jessica Williams

Source: The Times-Picayune | The New Orleans Advocate

November 20, 2019

Property tax assessments in Orleans Parish have come a long way from the days when seven assessors with a mishmash of policies determined the value of properties across the city.

And while Orleans Parish Assessor Erroll Williams has built the foundation for a well-functioning citywide assessor’s office over the past decade, a new report from the Bureau of Governmental Research says Williams’ office has fallen short in several areas.

Since becoming the city’s lone assessor, Williams has amassed a $13.1 million operating surplus that is more than 100% of his annual budget, according to the nonpartisan research group, which said those funds might be better spent in other areas of city government.

BGR also criticized the assessor’s use of sales prices as a basic method to determine property values and said the office should be more open about the way it values properties.

“The single assessor has put in place some of the necessary building blocks for a high-functioning assessment office, but still falls short in crucial areas,” the group said in the report, which was released Tuesday.

The report follows this summer’s massive reassessment of most of the city’s properties, which because of surging home prices in many neighborhoods resulted in an 18% increase in total assessed value across New Orleans.

Williams’ office has naturally taken some heat for the big jump in assessments, though the focus in recent weeks has turned to the New Orleans City Council and other agencies that determine what tax rates to levy following the assessment process.

Among the biggest criticisms in the BGR report is the assessor’s budget surplus. The money to fund the office comes from a 2% fee on property taxes that is collected regardless of the assessor’s actual financial need. Some of that money might be better spent on other city priorities, the group said.

In an interview Wednesday, Williams argued that a large chunk of the surplus, roughly $8 million, is reserved for a building fund for a new home for his office. In the past, he’s passed along some of the rest to other city departments that have needed additional funding, he said. The BGR report notes that Williams provided the city with $2.2 million in surplus funds in 2016.

He brushed off other critiques as misinformed and said he relies on the judgment of the voters who have put him in office.

“I recognize who judges me,” Williams said. “That’s the people at the voting polls, and not a nonprofit organization who felt like I shouldn’t be here anyway.”

Williams suggested that BGR, which endorses issues but not candidates, had someone else in mind for his job, but he declined to identify that person.

BGR was not entirely critical of Williams. The group praised him for creating an in-house data and maintenance program, standardizing the process for assessment appeals and sharing more information with the public.

It noted that he has an updated aerial map of New Orleans properties on his website that allows anyone to search for and get information on any property. There’s also a link where residents can go to review and pay their tax bill.

But the report questioned what BGR dubs “sales chasing,” or the practice of using sales prices to determine property values.

State law lets the assessor use one of three methods to calculate property values. One of them, dubbed the “market” approach, relies on sales prices. Another lets the assessor take into account the amount of income a property generates and a third lets him consider a property’s construction costs.

BGR contends that the assessor’s “market” method creates unfairness among taxpayers, as Williams must use a different method to value properties that haven’t sold recently.

Sales chasing “create(s) inequity through a dual system of valuation — a higher one for newcomers to a neighborhood and a lower one for long-term property owners — and contributed to undervaluation for unsold properties throughout the city,” the group said.

BGR cited that same concern in its 2009 report on the flaws of the seven-assessor system.

Williams said he uses sales prices when a newly constructed or significantly renovated home sells for a higher price than it originally commanded.

“If I look at all of the properties in the neighborhood that have a slightly different rate because of (their) condition, that’s not sales chasing,” he said.

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