We continue to present our views on constitutional amendments before the voters Oct. 12.
Amendment 1: Offshore services property tax — For
Louisiana businesses support a vast offshore oil and gas business that is vital to the nation and the world, and most of that energy production is in federal waters of the Outer Continental Shelf. For decades, goods destined for offshore rigs were assumed to be in interstate commerce and not subject to property taxes while stored in Louisiana’s coastal parishes.
Several coastal parishes are now seeking to charge the companies tax on materials destined for the OCS. This is a novel legal approach and one that is likely to be embroiled in state and federal courts unless Amendment 1, sought by the oil and gas industry, is passed by voters. Legislators approved it 83-12 in the House and 35-0 in the Senate.
While we generally believe that the tax base of local governments should not be restricted, there is a legitimate competitive argument that materials might be stored elsewhere along the Gulf Coast if the amendment is rejected.
The major energy companies can’t do anything about the price of oil, but they might well, in a time of lowered profits, react unfavorably to new tax burdens. We urge voters to approve this amendment and restore the tax law to the status quo before this novel approach is taken into the unpredictable waters of the state and federal courts.
Amendment 2: Special grants to public schools and LPB — For
Public school systems, because of a long-ago trust established from a legal settlement with tobacco companies, receive annual grants from the Education Excellence Fund. Several individual schools also receive the grants: one for deaf and blind students, another for gifted students in Natchitoches and the New Orleans Center for the Creative Arts. Amendment 2 adds the laboratory schools at LSU and Southern University in Baton Rouge to the list of recipients, as well as the new Thrive Academy in Baton Rouge, a residential public school. Other parts of the amendment would allow the Louisiana Educational Television Authority to get grants of the same amount, $75,000 per year; there is also a per-student allowance for the schools.
It’s about the same amount of money for each and not much in the large scheme of billions spent on public education every year. Since it’s from a trust account and not the state’s general fund, it provoked no controversy and passed the Legislature unanimously.
Amendment 3: Board of Tax Appeals – For
The amendment seeks to broaden the authority of a body of experts, the Board of Tax Appeals, to decide constitutional issues raised when a specific tax is being challenged by businesses. It’s intended to be a quicker way to resolve such disputes instead of using the courts as a first resort, which can be more costly and time-consuming.
This amendment was approved almost unanimously by the Legislature, with only two votes against.
The argument against this plan is that many tax-related constitutional issues will likely be appealed to state courts, anyway, which is still allowed under this proposed amendment. Still, there seems merit in giving a qualified body of experts a first look at these often technical questions. Even if appealed to the courts, the record established before the board might make the wheels of justice grind more expeditiously than at present.
We urge voters to approve it.
Amendment 4: New Orleans tax exemptions for affordable housing – For
Louisiana’s constitution limits property tax exemptions to those specifically enumerated in the document. This amendment seeks to add a new one for the city of New Orleans.
The aim is to address a widely acknowledged housing affordability crisis so that high property taxes don’t force residents out of their homes. How the city would accomplish this and just who would benefit remain to be determined.
We’d prefer to have more details, but the amendment and its accompanying legislation lay out some specifics and set up a public process to develop a policy. Most importantly, the amendment puts decision-making power under local control, where it belongs.
If the amendment passes both statewide and in Orleans Parish, the city would be able to offer property tax exemptions for buildings with up to 15 units, not including those used as short-term rentals. The change would allow the administration to create programs to spur construction or renovation of affordable units and to aid lower-income homeowners. The idea, according to Mayor LaToya Cantrell, is to provide one more tool to help achieve the larger goal of housing affordability.
Any proposals would go through the City Planning Commission and City Council, so there would be ample opportunity for public input. The amendment also specifies that any decrease in total revenue as a result of these new policies should not prompt a tax increase for other property owners.
Bottom line: This amendment is about whether New Orleans should be able to pursue policies it deems worthwhile without being hamstrung by the state. We believe it should.