The East Baton Rouge Parish School Board will wait a month before setting property tax rates for this year while it clarifies whether lowering those rates now would bar it from increasing them in the future.
At issue are dueling interpretations of Louisiana law -- one from attorneys with the school system and another from an attorney with the Capital Area Transit System, or CATS. The school board lawyers say a vote to lower property taxes now could not be reversed for at least four years; the bus system's lawyer says a tax reduction could be reversed next year.
Board member Dawn Collins said Monday that while many locals are hurting economically, she's inclined to keep property tax rates as-is so the school district is less likely to have to cut school staff "to protect our jobs." She said, however, that she prefers a short-term tax break.
"I would be more willing to do it if it was just one year versus four," Collins said.
Like all local governments that benefit from property taxes, the parish School Board every four years has to choose whether to reduce (“roll back”) tax rates or maintain them at current rates (“roll forward”).
If the board opts to roll back rates, it means lower tax bills for property owners in the parish. If it rolls forward those rates, property owners pay the same rates they did last year, but some pay substantially more than last year because their properties have appreciated in value.
Those higher values were captured earlier this year in a parishwide reassessment of all taxable property, which is conducted every four years. This year's property tax bills are due Dec. 31.
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Lowering millage rates could have their own adverse effects since they would reduce school tax revenue by an estimated $9.2 million and could lead to cutbacks in educational services for public schoolchildren in the parish.
The parish School Board is scheduling a special meeting for late October to make a final decision. They have until the end of October to decide.
The board first debated the issue last Thursday.
Taxpayers and the local governments that rely on their tax payments have been hurt by the ongoing coronavirus pandemic.
“I am against the roll forward this year because of the economic hardship our taxpayers are going through right now with people out of work and business owners having to shut down,” said board member Mark Bellue. “I think it sends the wrong message as a government entity to raise taxes at this point.
Bellue suggested waiting a year before returning rates to current levels.
Kelly Lopez, chief financial officer for the school system, however, said lowering rates now and foregoing that $9.2 million could lead to an overall shortfall. Her office is estimating an 8% decline in sales taxes this year compared to last, and that state funding will remain flat.
“We have to do what’s best for our children so I recommend that we go ahead and roll forward,” Lopez said.
Rolling forward millages requires a two-thirds vote of the board — six out of nine board members — a bar the school system has met repeatedly through the years. If successful, it would keep school millage at 43.45 mills overall, the maximum allowed levy. If the board takes no further action, millages will roll back to 41.25 mills, reducing property tax collections for 2020.
What prompted the month delay is the uncertainty about how long a rollback would last.
Bellue said the board needs to only roll back millage rates for one year, and then restore them if it would like.
“We can do it any time between now and 2024,” he said.
Bellue said he based his suggestion on legal advice he has heard from Creighton Abadie, general counsel for the CATS board, on which Bellue serves as president. The CATS board plans to hold a public hearing on the same issue Tuesday at 4:30 p.m.
In an email Monday, Bellue explained that "(Abadie) met with board leadership and CATS management to discuss the roll forward process sometime early last month."
Bellue also pointed to passages in guidance issued by the Louisiana Legislative Auditor's Office that he says support his case.
Board attorney Gwynn Shamlin, however, differs with Bellue, saying his own read of state law is if the board fails to roll forward millage now, the lower rate of 41.24 mills will be locked in until 2024, the next property reassessment year.
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When the issue came up last Thursday, another attorney representing the school system, Dennis Blunt, agreed with Shamlin.
“I don’t think you get the leeway to go back and forth,” Blunt said. “You either do it or you don’t.”
Shamlin said he's researching the matter further and will provide more information for the board to consider before it takes up the issue again.