The Public Affairs Research Council is of the opinion that almost all of the property tax-related bills in front of the Legislature should be rejected. The bills, almost all of which either create or raise exemptions or make it more difficult to raise such taxes, it argues would hamper local governments’ flexibilities in funding their own activities.
In 2000, local governments in Louisiana raised a little over $2.5 billion from their own resources and forgoes approximately 30 percent of that because of property tax exemptions on individuals. Of that total, roughly 80 percent is from property taxes, which are even more valuable to local governments in that real property is one thing the state itself does not use as a revenue source. Thus, PAR’s concern is real.
But also it is misplaced. A good case can be made that most of the requests to increase categories of exempt persons are not really necessary, but two definite changes that must be made are those proposed by SB 25 and HB 68.
The former removes the income cap, now $56,744, on homesteaders of 65 or above, at which they could claim to have their property continued to be valued at the assessment when they turned that age. This is a good example of the class warfare often visited upon the state’s citizens. Expenses can be high for the elderly, particularly health care, regardless of their income and this break will help those against whom high costs do not discriminate but who are now are discriminated against on the basis of income. The latter would exempt disabled individuals under the same standard.
Yet even more necessary are measures to curtail local governing bodies’ abilities to allow increases in property values as a result of quadrennial reassessments. This protection against automatic roll-forwards is essential because, unlike something like a sales tax which is precisely measured and based on active economic transactions, property taxes are measured infrequently, not terribly precisely, and are valued on the basis of passive, even no (if the property doesn’t change hands or gets improved), activity.
PAR’s reasoning here is that:
Taxpayers are already protected from unreasonable property tax increases in two ways. First, most tax increases or renewals require voter approval. Second, after each reassessment, millages are automatically rolled back to prevent increased collections due to the higher property assessments. The taxing body may roll the millages back up to their former level only after a public hearing and by a two-thirds vote. Thus, higher assessments will not always translate into higher taxes.
Thus, since protections already are in place, PAR argues that things such as limiting increases or making it harder for authorities to roll forward are too restrictive. But whoever wrote this report missed their own internal contradiction: the citizenry itself can choose to override anything the authorities do by permitting tax increases itself!
In other words, it does not matter how stringent such requirements may be on the authorities, public votes always can raise property taxes. For some reason, PAR would rather err on the side of government, even though it has a coercive, unlimited power to tax, by not making it harder for it to raise taxes, than on the side of the people, helpless to resist this onslaught other than by periodic elections and recall power. The goal then should be to make the exercise of this power by authorities as difficult as possible, while still allowing the people to retain it.
By this logic, the best of these bills, being the most restrictive on government, is HB 335 which removes roll-forward power completely from local authorities. If additional property taxes are needed, then government can make a case to the people by asking them to pass a new tax with more mills. If it’s a reasonable one, the people will pass it.
In its analyses on this issue, PAR needs to realize it is the power of the people, not government that should be enhanced.
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