The email early Thursday morning from a reader, David, betrayed agitation:
I have not seen one story posted on your web site, or any of the other news media outlets, about the council approving the millage and utility increase, at Tuesday night’s meeting.
We saw the carte blanche passage, with no opposition from the council, on AOC that night, and along with everyone losing their homes, and possibly out of work, their property taxes are going to be increased, along with the utilities they use to try to rebuild. I would think that goes along with the storm news and people would want to know.
David was correct. This newspaper, consumed with the ongoing storm coverage and with one member of our small staff out of town on a personal matter, had posted nothing about the council vote on Tuesday night. Nor, as best we can tell, had any other local media — well-staffed or otherwise; this historic, no-name weather event has monopolized the resources of newsrooms across South Louisiana.
But in fairness, Tuesday’s “carte blance” vote by the council, as David put it, was a typical council procedure: introductory ordinances are customarily voted on in a batch — “in globo,” as the parliamentarians put it — without debate. But when introductory ordinances come up for a final vote two weeks later there often is debate, and in the case of adjusting property tax rates, there will most certainly be debate, and it will be heated at times.
The IND previewed the Tuesday meeting with a story that afternoon that went out with the INDsider, our daily news email (subscribe at theind.com if you haven’t already), under the headline, “Council to consider slew of tax hikes, rate increases tonight.” The story prompted a member of the council to contact our news department to argue that the story was misleading — that the council isn’t hiking taxes; rather, the council member argued, the council would merely consider keeping tax rates at the same level as they were last year. That statement is misguided at best, misleading at least and disingenuous at worst.
In mid-July, Lafayette Consolidated Government posted notice in local media indicating that 19 property taxes, or millages, would be up for review. The notice used the term “millage increase,” which is as misleading as the term “roll forward” commonly used when referring to property taxes.
Some background: In Louisiana, property taxes are computed in mills. A mill represents 1/1,000th of a dollar. For a $100,000 home, a single mill in taxes is $100; $200 for a $200,000 home and so on.
Here’s why so many readers — and, evidently, council members — find the concept confusing and subject to spin: The parish tax assessor reevaluates the value of property in the parish every four years, and typically property values increase over time. Taxing bodies like the City-Parish Council are required by state law to adjust millages accordingly. Property owners, both residential and commercial, pay a slew of individual property taxes that are dedicated to things like drainage, libraries, schools, police protection, the Bayou Vermilion District, etc.. All of those millages add up to an annual property tax bill. For a home valued at $230,000 in Lafayette, all those individual property taxes, or millages, add up to an annual tax bill of roughly $1,200. But state law stipulates that a taxing body cannot raise more in property taxes than it collected in the previous year. As a result, state law requires a taxing body like the council to roll back the millage rate when property values rise so that it is only collecting as much but not more than it collected the previous year. If property taxes, for example, are up 5 percent in a reassessment year, the council is required to roll back millage rates 5 percent so it is collecting only as much as the previous year.
However, with a vote of a super-majority of a council — two-thirds, or six of the nine members of the City-Parish Council — the council can vote to roll forward the millage rate so it remains the same as the previous year. Technically, the millage rate remains the same, but if property values increased, that same millage rate generates more in property taxes — simply and solely because the value of property increased. It also means the taxing body collects more revenue, which is really what this is all about — revenue.
So, while a council member may be technically correct in arguing that taxes will not be raised since the millages will not be raised, if the council votes to roll forward the millage rates to the previous year’s level, then property owners’ tax bills rise and local government collects more revenue. Most of us who pay property taxes would call it a “tax hike” when our tax bill goes up, irrespective of what millages we're paying.
It’s worth mentioning that Louisiana, according to the financial website WalletHub, has the third-lowest property tax rates in the nation. Also worthy of note: Property tax rates vary by parish. Property owners in St. Tammany Parish pay almost as much in property taxes dedicated to their public school system as taxpayers in Lafayette Parish pay in total property taxes. Not coincidentally, St. Tammany Parish has a first-rate public school system relative to most other Louisiana parishes including Lafayette — at least in terms of buildings and amenities.
Most important of all, Lafayette Parish, especially the parish side of consolidated government, is suffering a cash shortfall as lagging oil prices drag down sales tax collections. While it’s probably a safe bet that the council will not vote to roll forward rates on all the millages up for review, some of them will have to be rolled forward to collect more revenue. Otherwise, local government will be faced with the unenviable task of deciding which services to cut in order to make do with less.
In the end, most of us in Lafayette Parish will face higher taxes — either through our individual property tax burden or through higher costs for rent, goods and services that are passed along to everyone by landlords and businesses paying more in property taxes. That’s a tax hike in most everybody’s ledger.