Dearth & Taxes

by Walter Pierce

Wednesday, September 21, 2011
By Walter Pierce

As Lafayette Parish voters decide whether a substantial property tax increase for our school system is worth it, consider this: We're low on the tax-burden totem pole and will be even if the proposition passes.

Wednesday, September 21, 2011
By Walter Pierce

As Lafayette Parish voters decide whether a substantial property tax increase for our school system is worth it, consider this: We're low on the tax-burden totem pole and will be even if the proposition passes.

The Education Committee of the Greater Lafayette Chamber of Commerce voted last Thursday on whether to support the Lafayette Parish School System's property tax proposition that will appear on the Oct. 22 ballot. The chamber being a bureaucracy, that vote - which the group is keeping close to its vest - will go to an executive committee, which will then make a recommendation to the chamber's board of directors to support, oppose or take no position on the tax. The final verdict on whether the organization representing hundreds of businesses in the metro area supports the tax won't be released until next week at the soonest. The chamber's position will likely be based in large part on the tax's impact on businesses in the area. But its position will not make or break the success of the proposition at the ballot box.

Nor will the support or opposition of this newspaper. We already painted ourselves into a corner last May in an editorial cover story, "Help Wanted," when we wrote about the connection between a new superintendent and the tax proposition: "We need long-term, stable leadership at the top... Asking taxpayers to pony up $600 million dollars - just more than half of the $1.1 billion plan - without that leadership in place is a non-starter."

Obviously there's little chance a new superintendent will be on board by Oct. 22. Can we change our minds about the "non-starter"? Of course. Will we? Time will tell.

But after encountering what we considered a misrepresentation of the tax prop by the Tea Party of Lafayette, which vigorously opposes the school system tax, we decided to dig into the issue.

The TPL in late August had taken to characterizing the ballot proposition as a 75 percent tax increase. In literature distributed on TPL letterhead, the conservative group four times referred to it as a "75% tax increase" (or some variation on that), and three of those references were underscored for emphasis.

In fact, if the LPSS tax proposition is approved by voters, the parish property tax burden for homeowners will not go up 75 percent; it will go up 29 percent. The 75 percent figure the TPL was using refers to the school system's allotment of parish property tax (city property taxes, which vary by municipality, would not be affected).

Factoring in the city property taxes that residents in the municipalities (except Broussard) also pay on top of the parish property tax, the overall property tax burden would vary if the proposition passes would nonetheless be less than 29 percent.

Currently, the property tax in Lafayette Parish that is devoted to the school system is 33.56 mills. (Use of the term "mills," from the Latin for "thousand," makes property taxes sound more complicated than needs be. Basically, if you move the decimal over two places to the left, mills become percentages. Hence, a 33.56 mills tax rate amounts to .335 percent of the value of the property subject to the tax.) The tax proposition to fund the roughly $560 million Facilities Master Plan would increase the school board's take by 25 mills, which is 75 percent of its current allotment.

But, again, the overall parish property tax burden for residents in Lafayette would increase 29 percent if the proposition passes - not 75.

TPL has since modified its literature on the school tax, specifying that residents' overall property tax burden would increase by "only" 29 percent. Yet a 30 percent increase in one's annual property tax burden is still steep. Can we fault a group that draws its name from the acronym for Taxed Enough Already for huffing and puffing about this?

It's probably been reported to death, but some quick math on what the tax increase would mean in Lafayette, based on 2010 tax rates: According to information provided by Lafayette Assessor Conrad Comeaux, a house within a municipality in the parish (except Broussard) valued at $150,000 paid $632.70 in annual property taxes in 2010 at a rate of 84.36 mills. If the tax passes, that same homeowner, with the homestead exemption, would pay $820.20 at a rate of 109.36 mills - a $187.50-per-year hike, or 29 percent increase.

For residents in similarly valued homes in unincorporated Lafayette Parish (and within the city of Broussard), the hike would be roughly equivalent - from $644.18 to $831.68. That, too, is $187.50 more per year.

For businesses, which are taxed at a higher rate, the increase would be even bigger. A business valued at $150K would see its annual parish property tax burden rise from $1,898 to $2,460, or $562 plus change.

So while the school board is requesting a sharp increase in parish property taxes to fund the Facilities Master Plan, would Lafayette's property tax burden really be onerous if the tax passes? Maybe not.

Arguably the best apple-to-apple comparison in Lafayette's case is St. Tammany Parish. The two parishes are roughly the same size: Based on the 2010 census St. Tammany stands at just under 234,000 while Lafayette is in the neighborhood of 222,000. Both parishes are relatively affluent and have experienced robust urban population growth over the last decade. Where Lafayette's has been steady and incremental, St. Tammany's exploded after Hurricane Katrina in 2005 as New Orleanians streamed out of the Crescent City and across Lake Ponchartrain. And taxes are higher in St. Tammany Parish by a significant margin, both property taxes and sales taxes.

The parish property tax in Lafayette is 84.36 mills. St. Tammany's is 151.50 mills. In fact, as an accompanying graph demonstrates, Lafayette Parish's property tax rate is the lowest in the state. Even if the school board tax proposition passes and an additional 25 mills are added to our parish property tax, our overall property tax burden will still be lower than St. Tammany's. And Caddo's, Calcasieu's, East Baton Rouge's, Orleans' and Rapides'.