Voters shoot down all three Cantrell-backed tax proposals
By Michael Isaac Stein
Source: The Lens
December 5, 2020
New Orleans voters on Saturday rejected a package of ballot propositions put forward by Mayor LaToya Cantrell that would have changed how the city spent roughly $23 million a year in property taxes. The plan would have cut roughly 40 percent of the New Orleans Public Library budget and distributed the money — roughly $7 million a year — to economic development, housing, infrastructure maintenance and early childhood education programs.
Voters rejected the measures by wide margins, with none securing more than 44 percent of ballots.
Cantrell’s administration fought hard in recent weeks to convince the public to approve the three propositions in a misleading campaign in which city officials, including the mayor, along with a coalition of local and national nonprofits disseminated false and deceptive information to the public.
The three tax propositions had maintained a relatively low profile until October when a grassroots opposition campaign quickly grew the “No on 2” battle cry, a reference to Proposition 2 — the part of the package that would have cut library funding. The Save Your NOLA Library coalition became the loudest opposition voice against a plan that had the support of the mayor, six out of seven of the city’s council members, other local Democratic leaders and a campaign by a group of local and national nonprofits.
“Win or lose, we’re gratified to see what a worker-led coalition can accomplish when voters, organized labor and membership organizations come together against monied interests dead set on austerity politics,” said a written statement from the coalition before the final results were in Saturday.”While we await the final results, one thing has become clear – voters across Orleans Parish have rejected this disinformation campaign and sent a profound message that crucial public services like the libraries cannot be used as political pawns.”
In another loss for Cantrell, French Quarter residents voted on Saturday against renewing a quarter cent sales tax in the French Quarter that has gone to pay for Louisiana State Police patrols since it was first approved in 2015. Cantrell planned to use the money to expand the newly created Grounds Patrol division within the Office of Homeland Security and Emergency Development.
Just over a week before election day, the French Quarter Management District dealt a serious blow to the tax’s prospects when it came out in opposition. The FQMD wanted the money to fund a program it administers, the French Quarter Task Force, which pays off duty NOPD officers to patrol on foot and in blue-light smart cars.
This was not a city-wide vote like the other propositions. Only residents of the French Quarter could vote, and there were only 892 total votes. The sales tax will now disappear starting Jan. 1 2021.
With the rejection of the three property tax propositions, it’s unclear what’s next for the public library or for city government. All the taxes involved in Cantrell’s plan expire at the end of 2021. Along with shifting how the tax proceeds were spent, the propositions would have also renewed the taxes for another 20 years.
Now that the propositions were rejected, the taxes will remain at their current rate next year, meaning the library will retain its funding. But the taxes go away entirely at the end of 2021 if they’re not renewed next year. In the likely event that the Cantrell administration and the City Council want to retain that revenue, they are going to have to put new ballot propositions to the voters next year and hope for a better result.
If the Cantrell administration tries to renew the taxes again, it will have to decide whether to put forward the same plan or an altered one.
As for the city, Cantrell threatened just days before the election that if the propositions failed, the city would be forced to escalate current city worker furloughs into layoffs. It isn’t clear why or how the failure of her tax plan would force layoffs. Despite claims to the contrary from Cantrell, the 2021 budget passed by the City Council in November was based on current property taxes, not the new ones Cantrell was proposing.
Save Your NOLA Library coalition released a statement on Friday condemning Cantrell’s layoff threat.
“This move – holding the jobs of New Orleans workers and citizens hostage, without justification, in the midst of a devastating pandemic for nakedly political purposes – serves as a fitting end to a campaign in which the Mayor’s office has repeatedly advanced false and misleading information to voters, often using taxpayer-funded channels to do so.”
Cantrell has also said that failure to pass the propositions would lead to an immediate funding gap for early childhood education. Proposition 2 would have reduced the library’s dedicated tax, but it also would have expanded the permissible uses for that revenue. Instead of just the library, the proposition would have allowed the City Council to allocate the money to “public libraries and early childhood education facilities and related programs in the City.”
Cantrell said that her plan was to ask the council to allocate $1.5 million to early childhood education programs, which would fund 100 seats in early childhood education programs.
Last year, the city allocated $3 million from the general fund to early childhood education. In the 2021 budget, the general fund allocation has been reduced to just $1.5 million. Cantrell was relying on the property tax proposal to make up for the gap and keep funding steady. She has repeatedly said that if the proposition failed, there was no money to make up for it and that early childhood education would be stuck with just $1.5 million in city funding next year.
An increasingly deceptive campaign
From the first time the tax plan was introduced in August, the Cantrell administration claimed that the library system could absorb a 40 percent cut without sacrificing any service or quality of experience for patrons. In fact, Cantrell claimed that the change would lead to an even better library that offers even more services.
But the math the administration used to make that claim was always faulty, and this week, Library Director Gabriel Morley admitted that he hadn’t seen any written plan for how the library would adjust to its new, drastically reduced budget.
The library is primarily funded through two dedicated property taxes. The first was approved in 1986 and expires next year. That tax is the one Cantrell is trying to reduce. The second tax was approved just five years ago in 2015. Together, the two taxes brought in roughly $20 million last year.
The administration’s central argument from the outset was that the library could afford the cut because it had underspent its dedicated revenues by an average of 11 percent over the last four years.
Of course, the proposed 40 percent cut was much larger than the cited 11 percent average annual surplus. But more importantly, critics argued, the 11 percent figure itself was misleading.
The Library’s relatively high surplus was driven up shortly after the most recent millage took effect — mostly in 2016 and 2017 — when surpluses were around 20 percent a year. Library board members and employees have pointed out that surpluses were high in those years because the library’s budget nearly doubled from 2015 to 2016.
It took time, the board members argued, to adjust to a 100 percent budget increase. And despite whether the library should have ramped up spending faster, it has, at this point, made that adjustment. In 2018 and 2019, the library spent 97 percent and 98 percent of its property tax collections.
Board members, library workers and proponents have argued that regardless of the average historical surpluses, the library is budgeted for nearly $21 million in expenditures next year, exactly matching its revenue collections. With Cantrell’s cut, the library would have had to reduce spending to meet its new, $14 million budget.
The library has built up a reserve fund of about $15 million. And Cantrell administration officials said the library could have used its reserves to bolster its reduced revenues over the next year or two as it figured out how to cut 40 percent of its spending. Officials offered broad ideas of how to do that, including finding new efficiencies and cutting staff. But the administration never came close to offering a comprehensive plan.
While Cantrell’s push to pass her tax plan began with questionable math, the campaign only grew more misleading in the runup to the election. In recent weeks, Cantrell, her administration, her political action committee and a coalition of local and national nonprofits ran a campaign littered with false and misleading statements.
For example, the Cantrell administration’s claims about the library surpluses escalated from misleading to just plain false. Originally, officials cited the 11 percent average surplus figure. But during a radio interview on WBOK in November, Cantrell said the library had “spent only half of their budget for the past five years,” which is not true according to the administration’s own figures.
Cantrell and other city officials have also repeatedly and falsely claimed that the proposal would reduce taxes. That is false. Cantrell’s plan was designed to be tax neutral.
Cantrell has also claimed that the new property tax rates were “baked into the 2021 budget” and that the city would be facing a $23 million revenue shortfall if it failed to pass. But the 2021 budget proposed by Cantrell and approved by the New Orleans City Council was based on the current property tax rates.
Cantrell administration officials did not respond to questions from The Lens to explain her claim that the 2021 budget was dependent on the millages passing.
On Thursday, just two days before the election, Cantrell threatened to start laying off employees if the millage proposals didn’t pass. But since the 2021 budget passed with the existing millage rates, it’s unclear why a no vote would force layoffs.
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.
A coalition of local and national non profits, led by United Way of Southeastern Louisiana, banded together under the banner Yes for Children’s Success Louisiana to produce misleading promotional materials. In one instance, a mail flyer from the group claimed that Proposition 2 was supported by the Bureau of Governmental Research. Just three weeks ago, BGR published a report clearly opposing all three ballot measures.
In another instance, the Yes for Children’s Success Louisiana group put out an advertisement featuring a “teen mother” who supported Proposition 2. As was pointed out by former Gambit editor Kevin Allman, United Way has used the same exact picture to represent a domestic violence victim for a campaign they ran in Ohio, and again to represent someone who participated in a low-income housing service offered in Oregon.
French Quarter sales tax renewal fails
On Saturday, French Quarter residents rejected a ballot measure to renew a quarter cent sales tax for supplemental public safety. The renewal failed overwhelmingly, with 67 percent (or 595 voters) voting against it to 33 percent (or 297 voters) for it.
Since the tax was first approved in 2015, the proceeds have been used solely to pay for Louisiana State Police patrols in the French Quarter and surrounding areas.
But due to budget constraints caused by the coronavirus pandemic, along with various accountability and transparency problems over the years, the city is ending that arrangement with the State Police. The renewal ultimately failed after the Cantrell administration and an influential French Quarter body couldn’t agree on how the revenues should be spent.
The French Quarter Management District wanted the city to give them control over the funds and to use them to finance a program they administer — the French Quarter Task Force. The French Quarter Task Force, first started by local entrepreneur Sidney Torres in 2015, uses off-duty NOPD officers to patrol the French Quarter on foot and in blue-light smart cars.
The program has been funded solely by an annual $1.2 million contribution from New Orleans and Company, a publicly funded, private marketing agency for the city’s tourism industry. Due in part to the coronavirus crisis, that funding has been cut off. So FQMD wanted to use the French Quarter sales tax to fill the gap.
But Cantrell had other plans, and shut down the possibility of that plan in October. Her administration said that it simply would not hand over millions of dollars to FQMD, which they cast as an unelected and unaccountable group. Instead, they wanted to use the money to fund the city’s new Ground Patrol division of the city’s Office of Homeland Security and Emergency Preparedness.
The central issue between the administration and the FQMD is whether the money should only go to off-duty officers, or whether the money could also be spent on the civilian grounds patrol. In negotiations, the Cantrell administration yielded somewhat, offering to split the money evenly between grounds patrol and off-duty NOPD officer patrols.
But it wasn’t enough for FQMD, which ultimately voted last week to oppose the tax and encourage residents to vote against. Also coming out against the tax was the Bureau of Governmental Research, a local non-partisan think tank, for reasons including “the City’s failure to finalize spending and accountability plans for the tax revenue.”
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