New Orleans voters will once again decide in a few days whether to approve a small increase in property taxes to fund the settlement of a decades-old lawsuit with the city's firefighters.
The proposed 2.5-mill tax on the Dec. 10 ballot would be used to pay most of $75 million in back pay the city owes the firefighters as well as to provide money to help the city pay its share of the rising costs for the firefighters' pension system.
Voters rejected the tax earlier this year when it was paired with another increase earmarked for the Police Department. That prompted this second attempt to get voter approval for the Fire Department millage, something required under the terms of the deal the city signed with the firefighters union last year.
Early voting for the election starts Saturday and then runs all next week, from Monday through Dec. 3.
The ballot in New Orleans will also feature the runoff in the race for the U.S. Senate seat now held by David Vitter and the renewal of a drainage tax that provides a significant chunk of the money the Sewerage & Water Board needs to pump stormwater out of the city.
The Fire Department tax, which would generate about $8.9 million a year for the city, would add $25 in tax for every $100,000 of a property’s appraised value. The tax is on the full value of a property; the homestead exemption would not apply.
About 53.5 percent of voters rejected the attempt to pass the tax in April, when it was combined with a 5-mill increase that would have gone to help the Police Department expand its ranks.
Officials hope that with voters considering only the fire tax this time, its chances might improve.
“One of the things we heard from folks before was that tying them together was problematic,” Deputy Mayor Ryan Berni said of the police and fire millages. “We believed all the folks who said that funding the firefighters' pension fund is a priority.”
The proposed tax would permit finalizing of the agreement between the city and firefighters, a deal that emerged after years of battling between Mayor Mitch Landrieu’s administration and the union.
The fight involved both the firefighters' demand for back pay they are owed, a battle that has been going on for several mayoral administrations, and the fragile financial health of their pension system due to poor investment decisions and generous benefits, issues which eventually led the mayor to withhold city funding from the system.
Those two issues were tied together in last year's deal, in which the city promised to pay firefighters the money they were owed and make its required payments into their pension system in exchange for concessions on benefit levels and investment policy for the retirement system. The administration estimates that the concessions will save the city hundreds of millions of dollars over the coming decades.
The city paid the first $15 million toward the back pay settlement this year. Regardless of whether the tax passes, the city is still on the hook for the rest of the $75 million.
If the tax passes, $5 million a year for 12 years will go to the firefighters who are owed back pay. The rest of the money generated by the tax will go toward the city’s payments into the firefighters’ pension fund. While the deal does offer the city some savings, those pension payments are increasing and are expected to jump from about $43 million this year to $52 million next year.
If the tax fails again, the city will still have to pay the firefighters their money, but over a longer schedule. The first payment would be made in 2019, followed by gradually increasing payments for the next 13 years. The money for those payments would have to come from the city’s general budget.
Before the spring election, both firefighters and the administration made significant pushes to get voters to agree to the new taxes. Multiple news conferences touting the benefit of increased police funding and settling the city’s obligations to the firefighters were mixed with endorsements by groups including the Business Council of New Orleans, which was involved in the earlier negotiations between the city and the firefighters.
This time, however, that public outreach has been largely absent. While both sides have said they hope the tax passes, they have not held any major events to urge voters to get to the polls.
Berni said that’s in part due to timing: The presidential race, followed by the Thanksgiving holiday, has so far left little time for campaigning. But he said he expects efforts will pick up in the final week before the Dec. 10 vote.