Tuesday, August 28, 2007

When in doubt, contract it out

I'm not necessarily saying that I have a better solution for handling the 5,000 plus property assessment appeals coming to the City Council, it's just that the standard mode of governance in colonial war zones like New Orleans and Iraq is to find an outside contractor to throw money at as quickly as possible.

As a result, the council is seeking proposals, due today, for a firm that will manage the complex process and handle much of the work reviewing the 5,262 appeals. The plan is to have a contractor hired by the end of the week; the job could be worth in the neighborhood of $500,000, said the council chief of staff, Ron Pursell said.


This article is the first on this issue to treat in detail the effect of a millage rollback on the actual tax bills of the property holders.

If the new assessments were a shock to many New Orleanians, new data show the city's tax rate could fall dramatically as a result of the new values.

By the end of the two-week roll review period -- during which assessors heard from thousands of constituents, in many cases lowering their appraisals -- the total taxable value of the city's real estate was up 45.4 percent from the previous year.

If that number stands, the tax rate necessary to collect the same revenue as last year would fall by 31.2 percent.

In real terms, the millage rate would drop from 175.19 mills to 120.5 mills. That's only slightly higher than the rate of neighboring Jefferson Parish, and it's far lower than that of St. Tammany Parish, which has been luring homeowners from New Orleans for decades.

One mill equals $1 in tax per $10,000 in actual value.

Such a drop would make an appreciable difference on tax bills. For instance, a homeowner whose appraised value jumped from $200,000 to $250,000 would actually pay less in taxes next year than he or she did this year. And the tax bill for a house that went from $350,000 to $500,000, a seemingly steep increase, would go up by only 6 percent.


But.. of course...

By law, taxing agencies, the largest of which are the City Council and New Orleans public schools, must "roll back" millage so that assessment increases do not result in automatic tax windfalls. They may, however, then "roll forward" the rate to the previous amount, although doing so requires a two-thirds vote.


The argument over the assessments cleaves between those who trust the city not to "roll forward" the millages to meet next year's financial crisis and those who don't.

Those who are less trusting might be inclined to see things differently if
  1. The new assessments were not so egregiously high.
  2. The appeal process were not so bizarre and burdensome on homeowners.
  3. The city was not aggressively demolishing properties without notification.
  4. All other operations were not being conducted by an administration that abhors transparency and a disingenuous recovery director who can't wait to get to work on his book.


Let me make it clear that I understand this process was initiated by some well meaning folks who wanted to do away with the old (even more) byzantine, elitist, and inequitable system of property assessments in New Orleans. But when untrustworthy folks are in power, such reform movements are often hi-jacked into something even worse than what existed before.

I could be wrong.. God knows I often am.. but if in two years, the property taxes on my apartment building demand that my landlord sells out to condo developers and puts me out on the street.. well I hope I at least get to say "I told you so."

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