16 May 2007

Committee action, May 16: HB 18, 19, 26, 27

HB 26 would amend the Constitution put a cap on the amount of money that a taxing authority can receive, beyond inflation increases, that could not be raised by the authority without citizen electoral input. Present law, when reassessment increases the value of property, allows the authority by a two-thirds vote of the seated membership to allow millages to remain the same; i.e., the total amount of money collected may increase.

Author Rep. Jeff Arnold pointed out to the House Ways and Means Committee that this bill was almost what had been passed tow years ago, but that the Legislature never really had intended for the authorities to have the ability to roll forward to its maximum without citizen input. Jefferson Parish Assessor Lawrence Chehardy said the argument in favor was more money was needed for local services, but that government should be entitled only to the rate of inflation to reflect increased costs, not any windfall from rapidly-escalating property values.

Dan Garrett, executive counsel of the Louisiana Police Jury Association, said in the previous bill that notification requirements were improved for greater public awareness, and that police jurors he spoke to said they never wanted to roll forward surreptitiously, and unless they really had to. He also criticized the designated metric to determine the inflation rate, the change in the national Consumer Price Index, was not accurate for many parishes. He said the law would hamstring local governments, and that they should wait for another round of reassessment to see if the previous change worked.

Rep. Ken Odinet commented to the opposition, “let me tell you how the real world works.” He pointed out some increases as a result of the hurricanes were astronomical and recounted a tale where he was the only person at a meeting by one authority, and that there were so many meetings you couldn’t get a lot of people, if any, to supervise. He said if needs are genuine, authorities could go to the people for an affirmative vote and it will be approved.

Arnold said there were many authorities that were one person, and their political positions were unimpeachable, they could roll forward with impunity. He also pointed out that in Orleans rolling forward almost always happened. Garrett argued that many authorities were comprised of elected officials and thus responsible to the people. He also didn’t like the term “windfall” used in the context of property value increases, equating it to as prices rise, sales taxes go up. He said the Orleans experience was “unique.”

Rep. Jane Smith said that Bossier schools (she was the superintendent before her election) never rolled forward despite many opportunities. But then whenever new money was justifiably needed, they always got millage raises. She implied that unilateral rolling forward would have soured the public on the school board and they would not have been in such a charitable mood concerning new taxes. “The people will come through when asked.”

Garrett objected to her use and others’ of the phrase “taxation without representation,” saying that at least with elected authorities by virtue of being elected there is representation. He said Smith’s experience just showed that the present system was working. Smith replied that a citizen vote led to an expectation of a set amount, but rolling forward often violated that expectation.

Arnold closed and moved to report favorably, as amended. It was passed without objection, bringing on HB 27 which is the companion bill to change the law. It got the same treatment.

HB 18 would increase the homestead exemption to (essentially) the first $150,000 value of a homestead. Chehardy pointed out that the last exemption change was in 1982 which had eroded by more than half the real value of the exemption through inflation. He pointed out that all other property tax exemptions are adjusted for inflation, which basically is what the bill would do.

Opponents pointed out that the existing level was the nation’s highest and that therefore few owners paid property taxes, while business and renters paid the majority; the burden would become even more accentuated with this bill. Rep. Billy Montgomery said what was good for business was good for the individual; if the state was phasing out taxes on business debt, then why should individuals be taxed on their debt? Odinet pointed out that individuals statewide paid 29 percent of all taxes, while business only paid 3 percent.

Rep. Israel Curtis wanted to pass out the bill, but the committee held off because author Rep. John Alario wanted to wait on the disposition of the appropriations bill. HB 19, which would institute only an annual inflation indexing of the exemption from its current level, was deferred as well for the same reason.

You had a roll going there and I wanted to stop it.
Montgomery, after asking a question to opponents of HB 18

Taxes paid by you, by me … if I were working.
Odinet, in trying to show individuals paid much more in taxes than businesses

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