Through most of last year, Mayor Mitch Landrieu was hot on one legislative priority: getting the Legislature to pass and then voters statewide to approve a constitutional amendment that would allow New Orleans to ask local voters to double two special city property tax millages that would help fund the police and fire departments.
Having won those permissions, however, the administration’s interest in raising the millage rates has cooled. There are no plans in place to ask local voters to approve higher tax rates for the two departments, and such an increase may no longer be needed, Landrieu said.
“We haven’t decided whether to do it or decided whether it’s necessary,” the mayor said Wednesday.
“It’s the last resort, not the first,” he said.
The proposal, which would allow the city to raise the police and fire property taxes from 5 mills to as much as 10 mills each, was narrowly approved by the public in November, with 51 percent of statewide voters and 59 percent of voters in New Orleans saying “yes.”
Its success came after a long string of failures by the city to get state lawmakers to sign off on a variety of other proposals, such as a higher cigarette tax or increased hotel occupancy tax, to bolster the city’s revenue. That fact — and the plan’s position at the top of the city’s legislative priorities — led many to assume the Landrieu administration would quickly take the next step and get a proposal to actually increase the rates in front of the voters.
If both taxes were to be increased to the new maximums, the city would collect an additional $34 million a year, according to state estimates. That money could go not just to general police and fire services but also to the beleaguered firefighters pension system, city officials said.
All of that is now on hold as the administration looks at what officials expect will be increased revenue from other taxes, and as it works out the details of its obligations to the Orleans Parish Sheriff’s Office and the firefighters pension system.
Nick Felton, the firefighters union president who has often been at odds with the Landrieu administration, said he had not heard that the tax increase might be shelved.
Even beyond the substantial pension woes, he said, the Fire Department needs money for equipment and trucks.
“This city’s in dire need,” Felton said. “I would hope we would be able to move forward with every revenue measure that we have.”
More retail purchases within the city limits, spurred by large new stores like Costco; a hot real estate market that’s driving up property values; and lots of tourists all mean more revenue for the city from existing sales and property taxes, Landrieu adviser Ryan Berni said Friday.
At the same time, the city is looking to see what happens with a May ballot proposition that would allow the Sheriff’s Office to shift some of its existing funding around to pay for some of the costs at Orleans Parish Prison imposed by a federal consent decree.
There are other factors involved as well.
Among them are the ongoing negotiations, lawsuits and task forces that are all parts of the fight between the city and the firefighters over the city’s obligations to fund their retirement system. Administration officials have said they will not go forward with the millage measure until those issues are ironed out.
That stance gives the administration leverage in those ongoing fights and also means that when and if they do ask voters for a higher millage, officials will know exactly what the price tag is for the pension system.
With those talks still underway, Felton said, it “could be quite premature and unacceptable for the mayor” to talk about not going forward with the millages.
It’s too late for the administration to try to put the taxes on the May 2 ballot. If it plans to move forward with any increases during one of the fall elections — which also will feature a vote on a nearly quarter -cent sales tax in the French Quarter to help pay for State Police in the Quarter — the administration will have to start the wheels turning this summer.
That would mean administration officials wouldn’t know whether the tax increases would pass as they craft the administration’s proposed 2016 budget, which is typically presented to the City Council in mid-October. That likely would result in a budget that includes various scenarios for the police and fire departments, depending on the outcome of the election. However, Chief Administrative Officer Andy Kopplin said that would not create a major problem.
While dropping the tax increase could be potentially controversial with the firefighters, Mike Glasser, president of the Police Association of New Orleans, said he questioned the need for a higher tax for the Police Department. He said he was skeptical the city would meet recruitment targets that call for 150 new officers to join the force this year, and he added that the city has spent money on consultants and other costs that it could have put into pay raises that would help keep officers on the force.
“I am somewhat suspect that this was necessary to begin with,” Glasser said. “I’m constantly hearing from them that they don’t have money to do things, and yet they have money for their pet projects.”
Follow Jeff Adelson on Twitter, @jadelson.