Every month there is a new ranking showing Louisiana among the most business-friendly states in the Union. That is backed up almost weekly by press conferences in which Gov. Bobby Jindal stands next to company executives who announce construction of new plants and thank him for approving the tax breaks, cash incentives and expedited permits to get them here.
But for all the ribbon and red tape cutting to welcome new businesses, firms that have been here a long time often feel they are getting the back of the hand from this administration when it comes to fair treatment in paying their property taxes.
That point was driven home, not for the first time, by a recent state Legislative Auditor’s report that cites the Louisiana Tax Commission with lax oversight of parish tax assessors, who are faulted for assessing many residential properties far out of line with fair market value while going years without reassessing other parcels at all. The audit also showed that the commission lacks a system for verifying the accuracy of homestead exemptions, resulting in 1,300 cases of property owners claiming excessive or multiple exemptions.
The under-assessment or non-assessment of residential property shifts the tax burden to businesses, which pay almost 90 percent of ad valorem taxes.
There are conscientious assessors, who keep their tax rolls up to date and their assessments, for the most part, within the 10 percent range of fair market value. But all of them also are elected officials, who are sensitive to the pressures from homeowners who want their tax bills kept low.
That’s where the state tax commission comes in, whose five members are appointed by the governor to ensure that parish assessors are following the law and treating all taxpayers and tax recipients, local governments, fairly.
It doesn’t always work that way. Governors have to get elected too, and tax assessors, as much as any of the courthouse crowd, can influence many votes, especially in rural areas. Former Gov. Kathleen Blanco bucked that pressure by appointing tax commissioners who weren’t tight with assessors and thus were more demanding of them. Maybe that’s why the assessors were early and enthusiastic supporters of candidate Jindal in 2007, who appears to have returned the favor by his appointment of assessor-friendly tax commissioners.
The audit found that from 2010 to 2012 the LTC approved $118 million in assessment decreases for residential and business properties and $10 million in increases with only a cursory review of the proposed changes.
At two monthly meetings attended by legislative auditors this year, the LTC approved 99 percent of nearly 9,000 change orders to correct errors and omissions in tax rolls.
The Jindal administration, finding it unconscionable that 99 percent of school teachers were rated effective by their principals, set up a more exacting evaluation system. But to have the LTC better scrutinize the work of assessors seems not so high a priority.
Being off on assessments is one thing; just not doing them defies explanation, as well as the state Constitution, which mandates that all property be reassessed every four years. In its sample of 33 parishes, the audit found that in one-third of them, including East Baton Rouge, at least 23 percent of residential property assessments did not change between 2007 and 2012.
The LTC responded that that doesn’t mean reassessments were not done, but just that there was no change in value. Yet that hardly explains how in north Louisiana’s three largest parishes, 66 percent of residential properties in Ouachita and 48 percent in Rapides did not change in value over five years, while only 4 percent went unchanged in Caddo. Does this mean Monroe and Alexandria are frozen in time, while Shreveport is a dynamic cauldron of activity? Or are some officials just not doing their jobs?
The tax commission disagreed with four audit recommendations but accepted one, to set up a state registry of homestead exemptions in order to ferret out illegal multiple exemptions held by individual homeowners. The Legislature asked for the same thing 14 months ago, but the LTC just hasn’t got around to it.
The commission would hop to on all of the audit’s recommendations, and assessors would feel the heat too, with one well-worded phone call from the governor’s office. But that might strain some close relationships, and who wants to be unfriendly?