For the second time in as many years, Louisiana voters could be asked to amend the state's constitution to provide property tax relief. But this time around, the tax break would apply only to people in New Orleans.
State lawmakers will consider during this year's session a ballot issue aimed at easing the cost of living in New Orleans by exempting certain residents from some property taxes.
The bill, prefiled by state Sen. Troy Carter at Mayor LaToya Cantrell's request, would leave it up to city officials to decide just who should be exempt and from what.
With an eye toward easing the tax burden on New Orleanians who live in neighborhoods where recent renovations have sharply pushed up the value…
If passed, the idea would be pitched to voters statewide on Oct. 12 — less than a year after they signed off on a proposal to phase in tax increases for certain homeowners all across the state.
“We are envisioning a policy that will offer relief to homeowners who earn less than the area median income by freezing property taxes, and will help incentivize home purchasing by including short-term property tax exemptions," Cantrell spokesman Beau Tidwell said.
The proposal, which was included in a draft copy of the mayor's legislative agenda obtained recently by media outlets, comes amid housing advocates' calls in recent years for policymakers to address an affordable housing shortage in the city.
It also comes a month after the City Council urged the Legislature to ease the tax burden on longtime New Orleanians who have seen their assessments and therefore their tax bills rise after renovations on nearby homes, in many cases only so that the properties can be used as short-term rentals.
In a February resolution, council members said they wanted to provide relief to residents whose tax bills have doubled in one year, who have lived in the city since 2004 and who have low to moderate incomes.
Low to moderate income was defined as earning no more than 120 percent of the area's median income. In 2018, that would have been a family of four with income up to $78,720.
Senate Bills 79 and 80 would leave it to Cantrell's administration to decide if those or some other criteria should apply.
Tidwell shared at least some of the administration's ideas for the exemptions in a recent interview, though he didn't say when those plans might be final.
He said the city wants to aim at least some of the exemptions at first-time homeowners who are purchasing homes with loans backed by the Federal Housing Administration — typically people with lower incomes.
The city-managed tax relief could also be "simpler, more transparent and more equitably distributed" than the payment-in-lieu-of-taxation, or PILOT, arrangements now given to developers who agree to create affordable housing, Tidwell said.
Those deals, which are also offered to firms that promise to employ local residents, are managed by the city's Industrial Development Board, a board with 15 members appointed by the mayor and City Council.
"This can also be a tool to incentivize building and maintaining affordable housing programs that are simpler, more transparent and more equitably distributed than PILOT programs, allowing smaller developers to be more competitive," Tidwell said.
While the city works out the program's mechanics, voters in October would be asked simply if New Orleans can exempt its property from "all or part of ... taxes that would otherwise be due." The purpose would be to promote "affordable housing."
The idea has drawn criticism from at least one lawmaker who questioned asking voters to approve a new tax relief measure so soon after a similar request went out last year.
"Logistically, that could be difficult, considering we just amended the constitution less than a year ago, and we don't know how that's working out," state Sen. J.P. Morrell, D-New Orleans, said shortly after the council issued its resolution.
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Morrell authored last year's measure asking state voters to phase in property taxes for Louisiana residents experiencing tax hikes of 50 percent or more in a single year.
In the interview, he also questioned the wisdom of asking voters across the state to approve a "New Orleans-specific remedy for a New Orleans-specific problem."
Carter could not be reached for comment. But City Councilman Jay Banks, who built his campaign around a pledge to reduce housing costs, called the measures a way for the city to help residents who are routinely slapped with tax bills they can't afford.
"I don't see why this should be a hard sell for anybody, because it doesn't hurt anybody," Banks said. "In fact, it helps people who have been put in positions where they can't stay in their family homes, which is just wrong."
The session begins April 8. The bills have been referred to the Senate's Revenue and Fiscal Affairs Committee.
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