A Tulane University institute that studies New Orleans schools says property tax exemptions in the city are granted to too broad an array of nonprofit organizations, professional societies, unions and fraternal clubs.
The Cowen Institute for Public Education Initiatives said in a post on its website that the city needs to tighten the nonprofit exemptions and continue efforts to ensure more equitable property assessments.
Such moves, the institute said, would provide needed money for schools in a city facing a financial crisis. Financial problems already have led to increases in property tax millage rates and a doubling of sanitation fees in New Orleans.
The Cowen Institute's review draws from information in a recent report from the New Orleans watchdog group, Bureau for Governmental Research, as well as other studies. The institute does not agree, however, with BGR's call to eliminate the homestead exemption in New Orleans, saying too many exemptions for nonprofits and too many unfairly assessed properties are the major issues.
Fixing those problems would bring in more revenue. While the increased money flow might tempt government to lower tax rates, the Cowen Institute said the rates should not be lowered for schools. "Additional funds collected from the tightening of the nonprofit exemption and more equitable citywide assessments are needed in a city that has historically struggled to fund its schools well," the institute said.
The Cowen Institute study noted that a sampling of property tax millage rates dedicated to schools in various parts of the state shows New Orleans "squarely in the middle" at 44.12 mills.
But the report cautioned that simply looking at millage rates can give an incomplete picture, failing to account for differences in the amount and value of properties in various jurisdictions.
BGR and the Cowen Institute are weighing in weeks before a "Tax Fairness Commission" appointed by Mayor Mitch Landrieu is due to make a preliminary report. The commission, created late last year, is studying issues including tax system fairness, how the tax system affects the city's economic competitiveness and whether it is adequate and stable enough to fund the city's needs.