Friday, October 17, 2014

The city should keep more of it

One major economic dysfunction of the City of New Orleans has to do with how little the perpetually booming tourism industry actually contributes to the city budget. A small portion of the hotel/motel tax revenue (about 11 percent of the total take) gets split among RTA, the Orleans Parish School Board, and the city's general fund. The rest of it goes either to the state or right back into the quasi-public tourism promotion boards.

So the city's top industry contributes almost nothing directly into the city's coffers where it might pay for police and fire protections and streets and clean water and schools and parks and libraries and all those other nice things the city (in theory) provides its residents.  And so any time city officials see an opportunity to grab a little bit bigger share of that, they should jump at it.
City Hall has decided to get more aggressive about collecting property taxes from some of the city’s hotels and properties that benefit from certain tax credits — a decision that could mean several million more dollars to spend on city services next year and into the future.

New Orleans City Council President Stacy Head, who has been trying for years to broaden the city’s tax base, released a statement Thursday saying the extra money might even “blunt” the need for future tax hikes.
They want hotels that have recently been sold to be assessed at something closer to the actual sale value instead of at the much lower valuations, most of them ask for. 
The Royal Sonesta Hotel on Bourbon Street, for instance, sold last year for more than $120 million, although the hotel’s owners argued its value is only $45 million. Williams subtracted only $5 million for the value of movable property in the building and set the value at $115 million.

In all, the assessor valued 10 hotels based on recent sales prices.

Every $1 million of extra value equals about $20,000 a year in taxes, which would be split among the city, the Orleans Parish School Board and various other entities that levy a property tax.
Read the rest of the article, and you see there's a long and contentious appeal process but, potentially, there's a lot of money at stake.  

In a way, this is the New Orleans specific version of the state's ongoing battle to make the oil companies pay their fair share of the cost of caring for the Louisiana coastline.  If you're going to make your fortune exploiting the unique assets of this region, then the people and the land of the region should benefit from your good fortune as well.

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