Despite winning passage of two bills that had stalled last year, Mayor Mitch Landrieu was dealt a mixed bag during this year’s legislative session.
Just one part of Landrieu’s three-piece legislative package aimed at addressing the city’s financial problems was approved by state lawmakers, a blow to an administration that is desperate to find ways to relieve the strain on the city’s budget.
Landrieu went into the legislative session that ended Monday with the hope of getting legislators to embrace a package of tax hikes on smokers, tourists and homeowners. The first two ideas met decisive defeat.
A proposal to add 80 cents in tax to every tobacco product purchased in New Orleans never made it out of a House committee. The bill’s sponsor, Rep. Helena Moreno, blamed a powerful tobacco lobby.
Meanwhile, a measure to raise the occupancy tax rate on hotel rooms by 1.75 percent was pulled from the House floor before it was considered. Its doom had been all but been ensured by the vehement opposition of a coalition of tourism industry leaders, including Lt. Gov. Jay Dardenne and New Orleans Metropolitan Convention and Visitors Bureau President Stephen Perry.
“I think the industry as a whole is very pleased that there was no change in the hotel tax,” Perry said. “It means that we have a competitive price structure, and it means that we have marketing funds sufficient to drive some real economic growth.”
The industry’s leaders are typically allies of the mayor, but in opposing the hotel tax increase they argued that it would make New Orleans among the priciest travel destinations for tourists.
“I think that was a surprise, when you consider the fact that Mayor Landrieu was formerly the lieutenant governor and is definitely involved in the arts,” political analyst Silas Lee said. “You just don’t have permanent friends and permanent enemies in politics.”
However, the mayor did succeed in pushing through a proposal to let Orleans voters decide whether to raise property taxes. The bill, sponsored by Rep. Walt Leger III, D-New Orleans, cleared the House and Senate without dissent. Leger sponsored a similar proposal on the mayor’s behalf last year that died in the Senate.
The current measure, as originally introduced, proposed raising the city’s special taxes for police and fire protection from their current five mills each to not more than six mills each, which would have let the city collect an additional $5.9 million a year. But as the session drew on and Landrieu found little support for his two other plans, the bill was amended to allow the current millage rates to be doubled.
As a result, if voters agree, the city would be able to raise the fire and police protection millages to as much as 10 mills each, potentially generating close to an additional $30 million a year for police and fire protection. The law says the additional funds could be used “solely for fire and police protection services that directly contribute to the safety of the residents of Orleans Parish.” It also says the city could not use the additional revenue to “displace, replace or supplant” the funding currently provided by the city for fire and police protection.
Deputy Mayor and Chief Administrative Officer Andy Kopplin said he interprets that language as meaning the city could use the extra money to pay the salaries and benefits of firefighters, for instance, including the $17.5 million in back pension payments the courts have ordered the city to cough up.
Voters statewide will be asked to approve a constitutional amendment authorizing the tax hikes on the Nov. 4 ballot. If the request passes both in the state and in Orleans Parish, the City Council would then be able to put the millage rate increases on a local ballot. The council and the administration would decide whether to seek the entire additional 10 mills or just part of them.
The special police and fire millages are not subject to the homestead exemption, meaning that homeowners pay the two taxes on the full assessed value of their property.
Council President Stacy Head said Tuesday that she favors putting the measure before local voters, in part because it would could prompt a discussion about tax fairness. Head has been pushing the city to take a closer look at nonprofit organizations that receive tax exemptions on properties that are producing income without, in her view, serving a nonprofit mission.
Kopplin said the administration plans to meet with council members to figure out how much of an increase voters would find palatable.
There’s no guarantee, however, that voters will warm to the idea of any tax hike.
“You never make assumptions when you ask voters for money,” Lee said. “Anytime you’re asking homeowners, voters in this city, to increase the property tax, no matter what the purpose, that requires a lot of persuasive action.”
The administration doesn’t have to look far in the past to see the potential difficulty in getting a property tax hike passed. A proposed property tax for the Audubon Nature Institute, supported by Landrieu, failed by a 2-to-1 margin in March.
“We saw with the Audubon referendum, it’s a different political environment,” Lee said. “With social media and the activism around social media, certainly there’s a new form of galvanizing that can be done for or against something.”
Outside of his financial package, Landrieu saw mixed success during the session. A proposal to shrink Orleans Parish Juvenile Court from six judges to four was approved. That measure had failed in the Senate last year.
The administration also succeeded in changing state law to empower the city to clean up blighted properties and charge the owner of the property or the abutting property for the work after a short notice period; to allow public workers other than NOPD quality-of-life officers to issue summonses for sanitation and nuisance violations; and to create a permanent method for the city automatically to receive $3.6 million a year in state reimbursement for fire, police, emergency and sanitation services incurred because of Harrah’s Casino.
But the mayor’s request for legislation to forgive the city $5 million a year in “GO Zone” hurricane recovery loan payments never made it out of the House Committee on Ways and Means. A proposal to create a special taxing district along the riverfront also never made it to a vote of the full House or Senate.
Among the mayor’s wish list of projects seeking state capital outlay funds, three were included in the capital budget: requests for money for a new fire station to consolidate engines 33 and 40 in Algiers, for upgrades to the 4th District police station in Algiers and for a pool complex at the Rosenwald Center in Central City. That does not guarantee the projects will actually be funded. Money for a plan to renovate the former Charity Hospital building to house City Hall was not approved.