The property tax rate in New Orleans is expected to drop slightly next year as a tax tied to the amount the city must pay on its bonds has dropped.
The tax – which is levied by an entity known as the Board of Liquidation, City Debt – will drop from 22.5 mills to 19.5 mills because it won’t have to pay as much to cover the city’s debt costs over the coming year.
The council, which levies taxes that track the amount the city will need for bond payments, unanimously approved the lower rate at a meeting earlier this month.
The Board of Liquidation tax rate reduction is mandated by state rules. The council is only allowed to levy tax rates that would yield a maximum of 10% more than it is expected to need in the coming year.
The lower rate will be a small drop for most homeowners.
The owner of a home worth $150,000 with a homestead exemption will see their property tax bill drop by only $7.50. A homeowner in the same situation with a $250,000 home will see their bill drop by about $50.
The reduction comes as the city pays off a significant amount of old debt, but is also set to begin issuing hundreds of millions in infrastructure bonds.
The board will pay about $70 million in debt service next year, but only $51 million on its existing obligations in 2022, after several debts are paid off, said David Gernhauser, secretary of the liquidation board.
But repayment of those bonds will be offset by about $300 million in new bonds the Cantrell administration intends to issue in the coming years to pay for road and drainage improvements and building work. of the city and other infrastructure. It’s part of a $500 million bond issue approved by voters last year.
Gernhauser said the plan would be to structure the debt on those bonds so that the payments more or less replace those on the bonds that have been paid off. This would prevent large fluctuations in the property tax rate over the next few years.
New Orleans voters will be asked to reconfigure five soon-to-expire taxes into four new ones on the Dec. 5 ballot, leaving the overall tax rat…
The liquidation council’s tax rate cut is unrelated to a series of ballot measures proposed by Mayor LaToya Cantrell’s administration to rededicate five expiring property taxes. On Saturday, voters will decide whether to approve the reallocation plan, which would increase funding for infrastructure, economic development and affordable housing and create a revenue stream for early childhood education while cutting the budget for the library.
Cantrell’s reallocation plan will keep the rates of these taxes at the same level as they are now.