Wednesday, Apirl 6, 2011
Like tax havens in the Caribbean, property classifications allow often wealthy landowners to dodge their fair share.
In the recent annals of irony, few stand out more than the genesis for this week's cover story about Lafayette landowners skirting what is arguably their fair share of taxes: the TEA Party of Lafayette, TEA being an acronym for "taxed enough already."
Wednesday, Apirl 6, 2011
Written by Walter Pierce
Like tax havens in the Caribbean, property classifications allow often wealthy landowners to dodge their fair share.
In the recent annals of irony, few stand out more than the genesis for this week's cover story about Lafayette landowners skirting what is arguably their fair share of taxes: the TEA Party of Lafayette, TEA being an acronym for "taxed enough already."
In his zeal to derail the creation of a tax increment financing district on Kaliste Saloom Road that would have helped wealthy developer Glenn Stewart, a retired medical doctor, bankroll his upscale Parc Lafayette retail center, TPL committee member Jeremiah Supple did some digging in parish records. Supple wanted to know, among other things, how much Stewart was paying in property taxes for what is some of the most high profile, desirable commercial acreage in Lafayette. Not much, it turns out. In fact, you'd pay more for a couple of Cajun Executioners and a pitcher of Budweiser at Dean-O's than Stewart was paying per year in property taxes.
This is a topic that had been flashing on our radar for some time. Given Stewart's very public spat with the TPL at that Feb. 23 town hall meeting and the general brouhaha generated by Parc Lafayette, it became a timely if overdue subject for these pages.
This is about good intentions - a law to protect farmers from an undue tax burden - that have been exploited by the affluent. It's about some of Lafayette's most prosperous letting the rest of us shoulder a greater share for funding our schools, our sheriff's department, our jail, our court system and public works.
This isn't class warfare. The rich won a long time ago. Uncle.
But it is about fairness, about paying one's due. Or not.
The good doc did nothing wrong by the book. He took advantage of the law of unintended consequences.
After he purchased the land the property tax converted to the much more expensive "fair market" commercial rate, which for those primo 13.5 acres would be about $48,000 annually.
But state law allowed him to apply to get it reverted to agriculture, and evidently such applications are routinely approved. In most cases, as best we can tell, a landowner need simply have a bale or two of hay on the land for it to be considered ag. A bale of hay. In the two years he has owned the land, Stewart paid $84 dollars in property taxes. Were he paying the commercial rate for the land - and he paid above what is deemed the fair market value for the property itself - the city and parish would have collected $96,000.
That's $96K that would have otherwise gone into city and parish coffers to fund the imperatives of government. Imagine all the effete, homoerotic, modern dance productions that would have underwritten at the Acadiana Center for the Arts. Or police and firefighter salaries. Or bridge repairs.
And it's just the tip of the proverbial iceberg. There are more than 4,000 acres of "ag" property within the city of Lafayette alone. We weren't able to check 'em all out, but we have a pretty good hunch some have no agricultural application. Ain't nothing growing or grazing on them. Nothing but weeds, acres and acres of 'em. And much of this land is owned by some of Lafayette's most prominent families who, in large part because their tax burden amounts to pocket change, are just sitting on the land waiting for an offer.
Yes, it's their land and they can do what they damn well please with it. But were they paying fair market taxes on the land, it likely would have been developed long ago.
Because holding onto the land is so cheap, these land owners can turn down fair market offers and wait for a Glenn Stewart to come along. That land on Kaliste Saloom being developed into Parc Lafayette is worth, according to Assessor Conrad Comeaux, $8 per square foot. Stewart paid $12 - a 50 percent markup. But if Parc Lafayette goes as planned, he could make a fortune on it.
Once commercial and residential development surround a parcel of land that long ago stopped being used for agriculture - real agriculture - it should be reclassified. Maybe not to commercial, perhaps to some interim classification that might help move it into commerce.
Allowing those landowners to drop a pile of hay on it and call it a farm deprives our city and parish of millions of dollars in revenue.
It's not right, and the law should be changed.