Lost in all the back and forth negotiations and legal maneuvering between the New Orleans Public School District and the City over finances, no one has yet adequately explained the "accounting error" that led to the schools' budget deficit in the first place. Now it turns out that the errors are not necessarily limited to NOPS only.
This story says the city may have overestimated revenue projections for this year by some $18 million.
New Orleans officials overestimated 2024 property tax collections by $18 million, further complicating what has become a fraught year for city budgeting.
The revelation came during the quarterly Revenue Estimating Conference, when the city’s chief economist, Matthew Cooper, said he misjudged how much of the city's assessed property taxes would actually be paid.
The error could have implications for other taxing bodies that rely on City Hall revenue estimates. The Orleans Parish School Board last year discovered a $50 million deficit, which school officials have partially blamed on bad revenue forecasting by the city.
City finances are incredibly complicated and the shortfall could be the result of multiple types of errors and shenanigans. The article emphasizes the lag effect from appeals after a reassessment year for one rather benign example. But note also, in this passage, the effect of a rapidly sickening economy.
But the overall property tax compliance rate is a combination of both real estate and business inventory taxes, and inventory compliance sagged to 78%. Inventory taxes are assessed every year, but Cooper said he didn’t know if the 2024 compliance rate is typical. He attributed it to businesses that closed and didn’t pay inventory taxes, but didn’t say if that occurred more frequently last year than other years.
“They don't want to pay their inventory if they’re out of business. They can't pay their bills in the first place,” Cooper said in a brief interview.
I'm sure the next mayor and council will figure a way out of it though. Probably the plan will involve bigger and better tax breaks for hotel developers.
NEW ORLEANS - After months of work with numerous stakeholders, Council Vice President Helena Moreno is introducing a proposal to create clear and concise regulations for developers to receive a Restoration Tax Abatement (RTA). For far too long, existing guidelines have been confusing to applicants, appeared inconsistent, and contained some outdated policies that do not support good development projects, nor do they ensure accountability on behalf of RTA recipients. Plus, approvals for RTAs appeared to be subjective. Moreno now wants to ensure that the determination is based on meeting criteria along with providing clarity and accountability to the program.
The Restoration Tax Abatement (RTA) Program provided by state law allows the City Council the ability to approve a tax abatement for commercial property owners and homeowners who expand, restore, improve, or develop an existing structure in a downtown development district, opportunity zone, economic development district, or historic district. If approved, the owner has the right to pay ad valorem taxes based on the assessed valuation of the property for the year prior to the commencement of the project for five years after completion of the work.