In less than 10 minutes Thursday, a proposed property tax hike for New Orleans grew by over $20 million.
House Bill 111 is part of New Orleans Mayor Mitch Landrieu’s legislative package aimed at helping him balance the financially strapped city’s budget. Landrieu wants to boost property and tobacco taxes, as well as the cost of a hotel room within the city limits.
The bill’s sponsor, state Rep. Walt Leger III, said the legislation just gives the City Council options on funding police and fire protection.
The legislation is the first step in a lengthy process for increasing property taxes. The City Council ultimately would decide whether to put the millage-rate hike before voters should HB111 clear the Legislature and be adopted as a constitutional amendment.
The bill sent to the Senate Committee on Local and Municipal Affairs called for millage rates for fire and police protection to increase from 5 mills to 6 mills each. One mill generates $2.8 million for the city, based on 90 percent collection receipts, and translates to $20 per year for a $200,000 home. In New Orleans, property owners now pay 5 mills for fire protection and 5 mills for police protection, on top of other property taxes.
HB111 went before the Senate committee a day after legislators in the House rejected the mayor’s bid to increase tobacco taxes in New Orleans. His proposed hotel-tax hike advanced on a close vote, with Lt. Gov. Jay Dardenne and other tourism officials urging legislators to reject it.
State Sen. Karen Peterson, D-New Orleans, handled HB111 Thursday, presenting an amended form that would allow the City Council to consider raising each special property tax rate to 10 mills. Peterson said the increase is necessary because of costs associated with the city’s Police Department and Orleans Parish Prison.
The Landrieu administration must find $17.5 million that a judge ordered the city to pay into the firefighters’ pension fund, and millions of dollars are needed to improve conditions at the prison. The mayor also wants to hire 150 new police officers this year.
HB111 was expected to generate an additional $5.6 million per year. Now — with the change — it would pump $30 million annually into the city’s coffers for police and fire protection. Because the bill is a constitutional amendment, registered voters across the state would need to approve it before the New Orleans City Council could decide whether to put it before the city’s voters.
The dramatic makeover of the bill sparked no discussion at the committee meeting. The bill zipped through without objection, and committee members turned their attention to other bills.
The bill’s sponsor, Leger, said afterward that the change is “an effort to create more flexibility for the City Council and the people of the city to meet the public safety needs, as well as the potential costs of the consent decrees and the pension judgment.”
Leger said any increases will require buy in, support and the vote of the city’s residents.
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