Property tax reform moving backwards
Dan Juneau - Jul 25, 2013
After Kathleen Blanco was elected governor in 2003, I had a meeting with her before her inauguration. One of the items I mentioned to her was the necessity to appoint a conscientious Louisiana Tax Commission (LTC), one that would insure that the elected assessors in the state would accurately appraise property and not play favorites with assessments. I told her that the property tax system in Louisiana was a mess and the LTC could play a key role in cleaning it up.
Governor Blanco subsequently appointed the most reform-oriented commission in modern history. That group did audits of assessments around the state and sent assessment rolls back to local assessors when they were not doing their jobs properly. Needless to say, most of the tax assessors were not enamored with Governor Blanco.
In 2007, I also met with Governor Jindal after his election but before his inauguration. I told him how important it was to keep the property tax reform effort moving forward. I emphasized the fact that, from an economic development standpoint, property tax administration in Louisiana was definitely a negative. The assessors largely were big supporters of Governor Jindal in the 2007 election. Shortly after his inauguration, he feted them with a fancy dinner in the Governor’s Mansion. They obviously had strong influence in his appointment of commission members.
A recent study by the state Legislative Auditor’s Office confirms that the LTC’s supervision over assessment practices in Louisiana appears to be lacking once again. Residential property is by law supposed to be assessed at 10 percent of fair market value. A few of the findings of the Legislative Auditor’s report included:
The LTC did not follow up on properties that were assessed by parish tax assessors outside of the 9% to 11% acceptable range of their fair market value. As a result, the audit found homeowners who owed significantly more in property taxes than their neighbors owe despite the properties having similar fair market values.
The LTC approved over $118 million in assessment decreases and $10 million in increases submitted by parish tax assessors for business and residential properties for 2010 through 2012 without determining the accuracy of the new assessments.
The LTC does not insure that parish tax assessors reassess properties every four years as required by the state constitution. It found that a substantial percentage of residences had the same assessment in 2012 that they had in 2007.
Parish assessors are elected, not appointed. There have been past instances documented in the media of favoritism being bestowed on some property owners via low-balled assessments. When one property owner gets a sweetheart assessment, other taxpayers have to take up that slack by seeing their millages increase and, consequently, their property taxes go up. It usually isn’t the guy driving the beer truck who is the recipient of such largesse.
Some parishes have a reputation for fair and accurate assessments. Some do not. Why is it that in the parishes that are more lax in accurate assessment practices the local governments that are dependent on property tax revenues don’t raise a ruckus about the situation? All politics are local I guess.
In 2015, Louisiana will hold another election to pick Governor Jindal’s successor. Sometime after the election and before the inauguration someone should meet with the new governor and stress to the governor the importance of having a tax commission that will diligently exercise its oversight over assessment practices in Louisiana. That mission was carried out effectively between 2004 and 2007. It needs to happen again.
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