They're up to something

Not clear exactly what yet but if you were listening to the press conference on Monday, there were some interesting quotes. 

Cantrell said the move ending the furloughs was the “first step on the city’s road to recovery.” She also indicated that it was also the first step in a larger plan to restructure the city’s workforce.

“We are making this move as a part of a much broader effort to restructure how we use our public servants, our public employees, in the city of New Orleans,” she said. “Everyone needs to have that shared sacrifice and do what it takes to move this city forward. … In the weeks ahead, we will come before you with specifics as it relates to emergency response, business response, community response and organizational changes as it relates to the City of New Orleans.”

They have some idea of how they want to "restructure" and it appears they may be using the emergency response and selective decisions about furloughs to get that implemented.  Kind of an ad-hoc budgeting process depending on how "optimistic" they get from month to month. 

Cantrell said the city was ending some furloughs with additional funds the city is projecting in a more optimistic outlook. If those funds don’t materialize, however, the move could cause layoffs later in the year, she said. 

The additional funds optimistically projected there refer to a possible new round of federal stimulus (which, yes, is exactly what we need but don't hold your breath) also stepped up sales tax collection if we get enough people vaccinated in time for that to help, and property tax collection which... it turns out... is now delayed by... wait for it... to much "optimism."

Waiting on your property tax bill in New Orleans? So is the rest of the city. Blame paperwork problems and overly optimistic city officials for holding up the annual notices telling property owners how much they need to pay.

Tax bills typically go out during the last weeks of December. But because of problems that prevented the certification of the tax rolls, the earliest they could now be sent is this week. None of the issues will change the taxes owed by residents. But City Hall said it will adjust the deadline for payments once the bills are sent out.

According to this, at least part of the problem comes from the way the bills were itemized. Apparently they were prepared in the expectation that the December millage reconfiguration would pass. It did not and so now things need to be revised. Of course the overall revenue doesn't change. So one would think there isn't much optimism/pessimism that comes into play.  Unless you were optimistically hoping to restructure your "emergency response, business response, community response and organizational changes as it relates to the City of New Orleans," and now you have to find an alternative means of accomplishing that.... perhaps through emergency measures. 

But we'll just have to wait and see as far as that goes.  There is one other matter in the story about the tax bills, though, and I'm not sure I understand it exactly.  

One potentially more substantive issue also is holding up the process: a disagreement between the assessor’s office and the Tax Commission about the value of “public service” property in the city, a category that largely encompasses property owned by utilities.

Under state law, those property values are set by the Tax Commission and passed along to local assessors, commission Chairman Lawrence Chehardy said. But in the final version of the tax rolls, the assessed value that the commission put on the total value of those properties is about $65,300 higher than what the assessor’s office estimated, Chehardy said. A meeting is set Wednesday to discuss the discrepancy and try to correct the problem, he said.

One way to read that is the city proposed to charge "public service" property... perhaps belonging to Entergy or maybe Cox or some such... less money than the state Tax Commission expected they should. I don't know if I'm reading that correctly but if I am then, given the assessor's recent tendency to give out tax breaks to large corporations, it's something to watch.

These two items are not related

The way this story presents the information, a casual reader might conclude that Caesar's "pledged" to uphold its obligations under its licensing agreement because Erroll Williams gave them a tax break. Rest assured this is not the case. 

Part of Caesars' pledge on the license extension deal was that it would continue to employ at least 2,400 people and add 500 staff after the hotel was built. It also committed to pay for various state and city infrastructure projects, including $19.5 million over three years to New Orleans.

Earlier this year, Caesars got a big break on one of its biggest city bills. The casino operator was one of the prime beneficiaries of a decision by the Orleans Parish Assessor to cut property valuations for 2021 — and thus cut property taxes — for businesses in the area because of the unprecedented effects of the coronavirus pandemic. Hotels saw the highest valuation cuts, at about 58%, which translates into an annual savings for Caesars of an estimated $1.5 million to $2 million.

The license agreement has nothing to do with the property tax assessment. The license agreement was negotiated with the legislature in the spring of 2019. The tax break is part of a larger corporate giveaway cooked up by the Assessor's office this year. Just after homeowners saw their assessments go up dramatically and as housing costs remain high while workers are being laid off left and right during a pandemic, Erroll Williams and Michael Sherman arranged to hand over $42 million to commercial landlords with deep corporate pockets.  I know the placement of the two paragraphs above in today's story might make it look like this has something to do with Harrah's/Caesar's lease. But it does not.  

Meanwhile, Did You Know.. next Friday your beloved City Council and School Board are scheduled to approve a series of back-tax exemptions that would cede another $25 million to Folgers. Last month when the state Commerce board gave its preliminary approval to the exemptions, a certain parish assessor took their side. 

At Friday’s meeting, Folger consultant Jimmy Leonard said the company requested the delay simply because it wanted the board to consider the application along with the company’s other newer applications at the same time. Leonard also presented a letter to the board from Orleans Parish Tax Assessor Erroll Williams describing Folger as a good taxpayer that has been transparent with him throughout the process. 

Together Louisiana members were armed with a letter of their own — from New Orleans Councilwoman Helena Moreno — that painted a different picture.

“A recent investigation by journalist Lee Zurik on WVUE-TV brought this matter to the public’s attention in August, due to the alarming length of time of not paying millions of dollars of taxes and now seeking a loophole to get a pass,” Moreno wrote in the Oct. 26 letter. “The total owed could be as high as $12 million…We cannot afford for a large corporation to not pay its fair share when our residents and small business owners are being asked to sacrifice so much.”

The board, nevertheless, approved Folger’s application because it was up to the tax assessor to place the property on the tax rolls, which he never did, Board Chairman Jerald Jones said.

Together New Orleans has scheduled a rally and press event at City Hall to discuss the Folger's situation. Although, at the moment that page says the event is Friday in the headline and Monday in the text. So maybe check back when they have it sorted out.

Austerity isn't just an accident of nature

It is city budget season.  Happy Holidays. There will be quite a few of those in the future for these folks.  Unpaid, of course. 

Chief Administrative Officer Gilbert Montaño told City Council members in a special meeting Monday that under the budget plan set out by Mayor LaToya Cantrell and her administration, furloughs that took effect this month for employees should continue through next year. 

Employees would be furloughed for one day per pay period, or 26 furlough days over the course of the year, Montaño said. People who earn less than $30,000 a year would be excluded from the pay cut. 

The city's public safety departments, such as police and fire, will also take a 6% and 8% cut to their overall budgets, while other departments could see up to a 40% cut, he said.

Wow. Especially sucks to be the "other departments".  

The hardest hit departments include Public Works, which will see its funding drop more than 40% to $34 million. That decrease includes cutting about 10% of its total positions.

The City Planning Commission, which is responsible for reviewing development proposals, is also slated for a 40% cut, will lose 6 of its 26 positions. The Vieux Carre Commission, the small agency that enforces the historic preservation rules in the French Quarter, is facing the deepest cut in the city at 42%, will lose two of its six spots.

To explain itself, the administration cites the obvious.  A compounding crisis of pandemic-induced depression has caused a sudden drop in expected revenues.  The federal government has failed to respond adequately and what aid it has made available has been watered down and diverted at the state level.  

All of this is, regrettably, true. But it's important to also keep in mind that many of the consequences of that disaster are still left to our local lords to decide. There are individuals in charge right now who impose their values on the question of who suffers the most during the disaster.   The above mentioned cuts in this budget are one example. The pandemic didn't decide the cut Public Works by one amount but NOPD by another.  Similarly, the pandemic didn't decide that businesses shouldn't have to pay the sales taxes they collected during Mardi Gras. Their lobbyists told the mayor that's what they wanted and she agreed to it.   The pandemic didn't decide it was time to give corporate landlords a big tax break paid for by residents and through layoffs. The assessor made that call.  

And, of course, we know the pandemic can't read the city ordinances but we are pretty sure that wasn't who decided to ignore this (admittedly toothless) city council decree that we would no longer stiff the Public Defender's office.  A person did that. On purpose.

Just stripping it for parts now

We're almost past the point of abandoning pretense.  At the same time that New Orleans administrators find themselves begging for help before a hostile audience in Baton Rouge, threatening city workers with furloughs and layoffs, and drastically cutting back on public services, it has been determined that now is also an excellent moment to give away millions of dollars to corporate entities who definitely do not need them.

Some of the biggest cuts will be for the largest downtown hotels, including the Marriott on Canal Street, the Hilton Riverside, and the Sheraton, as well as Harrah's Casino New Orleans and its adjacent properties.

Each could see their tax bills drop by between $1.5 and $2.5 million, based on current millage rates and estimates from data provided by the assessor.

The assessor says this is about helping "small businesses" and the local hospitality industry. But look at where the bulk of this goes. 

According to data compiled by the Downtown Development District, almost a third of the total cut in commercial sector valuations — or about $90 million — is accounted for by 10 downtown properties, including the cluster of properties at the river end of Canal Street owned by Harrah's New Orleans Casino, a division of Caesars Entertainment of Las Vegas. Harrah's valuations were more than halved to about $15.3 million, which will reduce its property tax bill by an estimated $2.4 million, according to the assessor's office.

Similarly, the Marriott Hotel on Canal, the Sheraton, the Intercontinental, the Crowne Plaza, the Roosevelt and the Ritz-Carlton will see their property taxes halved.

All are owned by national hotel management groups, suggesting that any tax savings will head to corporate coffers outside of the city.

In order to pay for this roughly $42 million tax cut gift to mega-landlords and out of town corporate interests, we will ask  residents - that is homeowners and renters combined since residential tax increases are always passed on to renters - to  pay about $30 million a year more, collectively.

Overall it means at least a $12 million drop in annual revenue to the city and public services that depend on property taxes.  And, of course, the poorer you are, the more likely it is you rely on such services or cannot easily pay to make up the difference if they are diminished.  

How does this happen? Who would push a disaster capitalism scheme like this on an already hard-hit city?  The same people who have been robbing that city blind since Katrina, of course. They are the pros at this, after all. 

Michael Sherman, a lawyer who was land-use adviser to Mayor Mitch Landrieu and whose current clients include 30 hotel owners, was among the industry representatives who consulted with Williams on the tax changes. Sherman pointed out that Williams had the authority to make the big cuts for commercial property owners because of a revision to a flood-damage law that came into effect after Hurricane Katrina. It required assessors to consider tax cuts after various types of disasters.

Who won the pandemic? The bosses won the pandemic. The landlords won the pandemic.  The same grifters who step in after every disaster to strip the broken pieces of the social contract for parts won the pandemic. But you can't say we didn't know it would be like this.  We've gotten pretty well used to it by now.