Property owners in East Baton Rouge Parish will get a tax break this year after the parish school system inadvertently waited too long to decide whether to keep the rates where they were.
That means school property tax millages in the parish will shrink from 43.45 to 41.25 mills when tax bills are sent out later this year. That’s a $15 break for a home assessed at $150,000 and a $35 break for a home assessed at $250,000.
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The property tax is subject to Louisiana’s homestead exemption, so the first $75,000 in value on the home is not taxed.
The lowered tax rate means the school system is forgoing an estimated $9.2 million in additional property tax revenue this year. That’s money some school officials were banking on to offset an expected 8% decline in sales tax revenue thanks to the coronavirus outbreak, as well as shrinking state funding due to lower enrollment.
The property tax reduction could lead to cutbacks in educational services for public schoolchildren in the parish.
The tax break, however, will also ease the tax burden of property owners in the parish, many of whom are also struggling economically thanks to the pandemic.
Every four years in Louisiana, including this year, local assessors reassess the value of property in their parishes. Once that reassessment is finished, local governments decide whether to lower the property tax rates (roll back) or keep the rates at their current levels (roll forward) and reap the benefits of higher property values.
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In 2016, the last reassessment year, the School Board voted to roll forward millages and was expected to do so again this year. But when the item came up at the Sept. 17 board meeting, the board got stuck on dueling interpretations of state law: If the board lowered those rates now, would it be able to roll them forward a year from now, or would it have to wait four years to do so?
The board opted to delay a vote, with the idea the legal issue could be clarified in the meantime. It turned out to be a fateful decision.
Votes on rolling forward millages require 30 days of advance public notice in the form of paying for an advertisement in the local journal, in this case The Advocate. A delay meant the board couldn’t consider the issue again until late October at earliest.
Kelly Lopez, the chief financial adviser for the school system, was clearly unhappy with the delay and worried about the tight timetable. The reassessment process was not finished until early August, longer than it has in year’s past, leaving less time to set millage rates.
But when questioned on Sept. 17, Lopez suggested the board had until the end of October to have a final vote.
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“So we’re clear that we do have time if we defer it?” asked board member Mark Bellue before the vote to delay a month.
“We’re going to try. I’m going to call the Legislative Auditor tomorrow,” Lopez responded.
“Millage is tricky. There are a lot of rules,” she added.
The next morning, Sept. 18, Lopez called both the parish Assessor’s office and the Legislative Auditor’s office and got some bad news: She shared that news later that morning in an email to School Board members.
“We will be unable to have another vote due to the timing issue,” Lopez wrote.
It turns out, the board had far less time than Lopez indicated the night before.
“The Assessor’s office must have all information, approved by the Legislative Auditor’s office, by the second week in October,” she wrote. “Because of their timeline, we would not have 30 days to complete the entire process.”
She said the loss in additional property tax revenue will affect both the current 2020-21 fiscal year, as well as the 2021-22 fiscal year, which starts July 1.
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Lopez, however, was able to get an answer to the legal dispute that tripped up the board the night before.
“Per the Legislative Auditor, we can roll forward the millages for the 2022 calendar year,” Lopez said.
That means the board can restore millage rates to 43.45 mills a year from now and won’t have to wait until 2024, as school system attorneys had suggested.
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