A proposal to hike property taxes by $26.6 million a year in New Orleans to help finance an expansion of the Police Department and pay off a decades-old $75 million judgment owed to firefighters failed Saturday, creating a major hurdle for Mayor Mitch Landrieu’s public safety agenda for the coming years.
With 100 percent percent of the city’s precincts reporting, 54 percent of voters had cast ballots against the 7.5-mill increase. It was losing by about 1,800 votes in the low-turnout election.
At the same time, voters appeared to have approved selling about $120 million in bonds over several years that would largely go toward street repairs, with some of the money also to be used for new firetrucks and other capital projects in the city. The bond issue does not require a tax increase and passed with 53 percent of the vote.
It is unclear where the failure of the millage leaves the Landrieu administration, which has said that without the extra revenue, achieving the twin purposes of the millage — expanding the Police Department and paying the city’s debt to the firefighters — would require significant cuts to other services unless the city can come up with other new revenue. The taxes would have brought in an amount equal to about 4.4 percent of the city’s total budget this year.
The city could put the millage increases on a future ballot, but officials did not say before the vote if they had a backup plan in case of a defeat at the polls.
In a statement late Saturday night, Landrieu said: “While we are disappointed with the election’s results, we remain fully committed to public safety as our top priority. Unfortunately, this means that we will not be able to grow the NOPD to what it needs over the next few years, barring some unforeseen stream of revenue. And in order to honor our commitment to our firefighters and pay them what they are owed, other parts of the budget will have to be cut.”
He added, “We are appreciative of the public’s support for the streets renewal so that we can continue our positive momentum forward in repairing our aging infrastructure.”
The city’s agreement with the firefighters apparently will remain intact, though the payments will be made over a longer period than the 12-year timeline that the millage increase would have allowed.
The ballot measure was actually a combination of two different tax increases: a 5-mill hike for the NOPD that would have generated about $17.7 million a year and a 2.5-mill increase for the Fire Department that would have brought in about $8.9 million.
The two measures were proposed in early January, with the administration apparently hoping to capitalize on concerns about crime — spurred by reports of the Police Department’s dismal response times and fears raised by several high-profile crimes in the city — to carry the combined ballot item to victory.
The millages were put on the low-turnout April ballot, perhaps on the theory that the voters who would go to the polls on that day would be predominantly those motivated to support such a measure.
Both those strategies seem to have backfired, however. Residents throughout the city were skeptical of providing more funding to the NOPD, even as groups such as the Bureau of Governmental Research, the Business Council of New Orleans and the River Region and public employee unions came out in favor of the plan.
The millage increase, which would have cost owners $112.50 a year for every $150,000 of their property’s value, has been a major initiative of Landrieu’s administration in recent years. Voters both in New Orleans and statewide gave permission for the city to put the increase on the ballot by approving a state constitutional amendment in 2014. About 59 percent of voters in the city approved that amendment.
Just getting that far had been a challenge for the Landrieu administration, which had lobbied the Legislature unsuccessfully for a series of measures that would allow the city to bring in more tax revenue.
As those efforts failed, the administration turned its attention to the plan that would allow it to double existing 5-mill property taxes dedicated to the Police Department and the Fire Department.
Even after the constitutional amendment passed, the administration delayed asking voters to raise the millages for about a year as it engaged in heated negotiations with the firefighters union over a decades-old suit over back pay, more recent lawsuits against the mayor for failing to properly fund their pension system and an overhaul of that system sought by the administration to trim benefits and establish more oversight by City Hall.
Once the administration and the firefighters finally reached an agreement in the fall, Landrieu asked the City Council to put the tax hikes before voters.
Follow Jeff Adelson on Twitter, @jadelson.