Set rates to curb BC property tax hike temptation

Blog: Between The Lines

Abstract

Not only will the start of 2024 greet Bossier City
with a decision
whether and how to extend the city's public-private partnership with Manchac
Consulting, but also a chance to signal to a beleaguered citizenry that
holds taxing decision-making power that its days of splurging on questionable
spending priorities are over and the consequences mitigated.

Until recently for two decades, an out-of-control
City Council majority, aided by past mayors, spent several hundred million
dollars, with a couple
hundred million of that – on a money-losing arena, a parking garage for a
landlord that went into receivership, on a high-tech office building that never
lived up to inflated promises, on a road to nowhere, and for other less
grandiose schemes – going to what charitably might be called questionable
priorities, but perhaps more realistically can be described as wasted and unneeded.
Debt owed at the end of 2022
was almost $435 million and has left residents with the highest per capita debt
of any city in Louisiana at just under $7,000 each.

Operating monies as well show a pattern of dubious
use. Besides the Manchac contract, the city
subsidizes tennis playing and out-of-towner
use of parks at residents' expense. And a new hybrid, potentially giving
away to the Port of Caddo-Bossier a water distribution facility unless an
unlikely chain of events occurs to compensate fully the city, is an unforced
error looming over the city for decades to come. Meanwhile,
many city employees can't receive pay raises in an era of higher inflation, or
retired firefighters get stiffed on the city contributing to their health insurance
premiums due to overbearing debt and poor current spending choices.

This background of fiscal imprudence establishes
the environment under which the city will ask next year for a renewal of two
property taxes that provide funding for public safety. At its last
meeting, the City Council set a public hearing for renewal at its meeting
after the next, Jan. 16, that begins the process of asking voters for another ten
years' worth set currently at  a combined
11.03 mils dedicated to maintenance and operations.

It follows the playbook when the calendar puts a
millage expiration the year of city elections, which it adhered to in 2020 for the
6.19 mil tax currently set at 5.98 for public safety salaries. That is, cue up
a vote before national elections in that year in time for both budgeting with,
if the measure passes, assurance of that revenue for the next year and before
the next year's city elections, to avoid conflating talk of taxes with
incumbents' quest for reelection the next year and for that year keeping turnout
low so that the directly affected party of city employees – in public safety – disproportionately
are likely to participate in that election to help achieve item passage.

The expiring millages, like the previous (these are
the only three subject to votes; the city's other, the general alimony charge for
operations currently set at 5.57 under the Constitution doesn't need voter
approval) actually were approved at a maximum of 11.41 in 2015 but were not
rolled forward. Unlike levies on economic activity like sales taxes, property
taxes hit assets, and the Constitution
distinguishes between the two by forcing local governments to roll back
millage rates after the required quadrennial reassessments that occur during
presidential election years so that any reassessed property (not new to the roll
or part of a transaction where the market sets a value) pays the same amount as
prior to reassessment, as calculated in the aggregate of all parish property.

Alternatively, a local government may choose to roll
forward millages the year after a reassessment, at least up to the maximum authorized
rate, recapturing some or all of the revenue forgone by any increase in the parish
tax base. In the case of a city government, that requires a two-thirds supermajority
vote by its council, or five votes in Bossier City. Note that it could work the
other way, and did
in 2017 in Bossier City: a decline in the tax base automatically could
shift rates higher up to the maximum rate without need of a Council vote.

This is why elected officials like to send
renewals off at the previous rate approved by voters rather than a rate that they
have not stopped from rolling back, or even voluntarily set themselves. Indeed,
after the 8/15/2020 renewal of the salaries millage at the original 6.19 rate,
the Council
a month later rolled it back down to the 5.98 rate charged previously prior
to the 2016 reassessment, in the knowledge that the 2020 reassessment rose –
only about six months prior to 2021 city elections.

The same scenario could well play out in 2024. The
four graybeard councilors for whom this will  be their fourth or more reassessment –
Republicans David
Montgomery and Jeff Free,
Democrat Bubba
Williams, and no party Jeff Darby
– assuming less than a year from now city voters haven't amended into the
charter lifetime three-term limits that would disqualify all four from running
for reelection and all succeed, may want to put onto the August ballot for
renewal the previous
maximum rates of 8.61 and 2.80 and then roll back to the current 8.32 and
2.71 shortly thereafter if the measures are approved, as they did in 2020 with
the other levy.

Except that then, given the city's fiscal problems
that they foisted onto it, the temptation remains palpable months after 2025
elections, and weeks after their new terms begin, to roll all 2025 rates
forward partially or entirely up to the (current combined) maximum of 23.36. It
would take one more affirmative vote, and over the past 30 months Republican rookie
Councilor Vince
Maggio, assuming he runs for reelection and succeeds, on many occasions has
proved himself to be a compliant lapdog to the graybeards and could provide
that vote.

Therefore, to prevent unequivocably any chance at
a tax increase, the renewals should be authorized for an election at the 8.32
and 2.71 rates. One thing hampering the city's growth – it barely gained in
population from 2010 to 2020 – is its higher-than-necessary property tax rates,
which put in fifth-highest among Louisiana's ten largest cities and 50 percent
higher than its peer cities Kenner and Lake Charles.

The Council vote to ask for renewal that will come
soon – and it must by its last meeting in February to make the Apr. 27 general
municipal election date since the July and August dates in 2020 were one-offs
to make up for pandemic-cancelled elections and aren't available this time – must
reflect the current rates, not the past maximums. It's the best way to build
trust in the citizenry for renewing that it won't have to pay for councilors'
past mistakes, as well as sets the city up better for future growth.