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New Orleans May Get Property Tax Windfall

by Tony Klein, Houston, September 2012

Tax jurisdictions in Orleans Parish, Louisiana find themselves in an enviable position. Due to a state tax loophole, they have the option of keeping a big property tax windfall.


Usually, taxing bodies are required to roll back their tax rates when they receive additional revenues. However, the state law only applies in quadrennial reassessments and this is not a reassessment year.


How Big Is the Windfall?


About a quarter of the properties in Orleans Parish received a higher assessment with this year's revaluation. The total assessed value of property increased 10%, from $2.39 billion to $2.63 billion. The numbers could change once all appeals are settled. But if the increase stays at 10%, the City of New Orleans could get an extra $10 million in property tax revenue.


How Did This Happen?


When the city changed from having seven assessors to just one, the new citywide assessor ordered an off-year reassessment as part of his initial comprehensive review.


Can They Keep All the Money?


The short answer is yes. State law requires taxing bodies to roll back the tax rates in quadrennial reassessments. However, this year is not a quadrennial reassessment year so the roll back is not mandated. A spokesman for the mayor said the city has no intention of rolling back tax rates.


Who Else Stands to Benefit?


In addition to the City of New Orleans, the Orleans Parish Public Schools, the East and West Bank Levee Districts, the Sewage and Water Board, the zoo, aquarium and various law enforcement districts could all see increases in their property tax revenues.


What Does This Mean for Property Owners?


Even if jurisdictions choose to roll back their rates, higher assessments at current rates will still make tax bills more expensive. It all depends on how your assessment changed from the revaluation, how successful your appeal is, and how each taxing body sets its rates.