property tax fiasco in N'awlins

From the op-ed page of Thursday's Wall Street Journal:

The second anniversary of Hurricane Katrina arrived yesterday, with the White House disclosing that U.S. taxpayers have chipped in no less than $127 billion (including $13 billion in tax relief) to rebuild
the Gulf region.

That's about $6,700 in taxes taken from the average family of four...I wonder if they'll send us a thank-you card?

But we thought we'd draw attention to a little-discussed issue in New Orleans that may well determine how many residents ever return to their homes--to wit, rising property taxes due to cleaner government, of all things.

OK, an interesting topic in any case-- especially for Hoosiers caught up in their own property tax fiasco. The recent history in New Orleans:

Property taxes in the city are suddenly rising by hundreds and, in some cases, thousands of dollars above what they were last year. As the Times-Picayune reported three years ago, the city's system of assessing property values through seven different tax assessment offices allowed city officials to play favorites. The homes of longtime residents were assessed below homes that were recently sold. The proof was in the tax rolls: Neighbors with similar homes often paid very different amounts in property taxes.

Following the Times-Picayune's series, the state ordered New Orleans to re-assess property values throughout the city, and voters in one of the seven districts elected reformer Nancy Marshall to be their tax assessor. Ms. Marshall has since taken the lead in assessing homes at their fair market value--no more special favors.

The new tax assessments started coming out in late July, and, lo, they are up an average 55% across the city. In Ms. Marshall's district they are up 68%. With higher assessments come higher tax bills, something homeowners are learning to their dismay. Since the beginning of the month, hundreds of homeowners have shown up at City Hall to complain.

Sounds familiar...

Many have attempted to lower their tax bills the old-fashioned way--by asking their tax assessor for special handling. Others are lobbying the City Council to lower tax rates.

As it happens, the latter is also mandated by the Louisiana constitution. To stop local governments from collecting tax windfalls when property values spike, the state requires local governments to roll back property tax rates in hot housing markets.

Sounds good, although you'd hope such a process would not need to be mandated. Alas, we're talking about government here...

But this being New Orleans, the city has followed the law in the past by cutting property tax rates only to immediately raise them again.

A-ha...let's try to get around the letter and the spirit of the law. Again, we're talking about government here. It's nice to see Louisiana political leaders live up (no, down) to their stereotype.

Mayor Ray Nagin refuses to rule out playing the same game this year. His office wouldn't answer our questions on the issue, referring us instead to the city's tax assessors.

That's not a good sign. What kind of leader will Nagin be in this context?

Notwithstanding Mr. Nagin, there is an opportunity for leadership here. The City Council will likely cut property taxes and Council President Arnie Fielkow is taking the lead in meeting with homeowners to discuss the issue. What the Council must now decide is whether to give homeowners a strong reason not to flee the city before their property tax bills come due later this year.