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Non-profit-owned property could generate much-needed tax revenue

Published: Jul. 23, 2014 at 11:34 PM CDT|Updated: Jul. 30, 2014 at 9:56 PM CDT
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City government could definitely use more funds for police, the Fire Fighters' Pension Fund and street repair. And some City Council members argue that putting more property owned by non-profits on the city's tax rolls is a great place to start.

"Number one, we have to spend our money very wisely, but number two, we have to collect every single dollar that's due to the city, so that the tax burden is borne equitably," said City Councilwoman-at-Large Stacy Head. "We have at least 15,000 parcels, and that is in the billions of dollars in market value.

The city's other at-large council member agrees.

"This is not just looking at colleges and universities and churches and saying, look, you pay the tab. However, non-profits by and large rely upon the police department, they rely upon the fire department and use the same streets, so it's not absurd to consider some sort of public safety costs to participate in paying for all the things we've got to pay for in New Orleans," said Councilman-at-Large Jason Williams.

Head and Williams believe many non-profits have myriad properties that are sitting idle and  benefiting no one, but yet they remain tax exempt.

"There are a number of properties that are on the rolls that are out of commerce, and it's wasteful," said Williams.

"Rental housing that is not dedicated to homeless or exclusively low-income housing, or rental properties where you have the executive directors making hundreds and hundreds of thousands of dollars - those are not, in my opinion, properties that should be subject to the complete ad valorem tax exemption under the law," Head said.

The Bureau of Governmental Research has long been hot on the issue.

"The only restriction is that it can't be used for unrelated commercial purpose, but that means somebody can hold property for an investment, they can hold it and not redevelop it, which creates its own set of blight problems," said BGR President and CEO Janet Howard.

In 2011, BGR released a report entitled, "The Non-Profit Margin, Addressing the Costs of the Nonprofit Exemption in New Orleans."

"If the non-profit properties were on the tax rolls, the estimate is that you'd increase the tax collections by $125 million," said Howard.

And Head thinks the situation would be made much better if entities like HANO and NORA would  sell their surplus properties.

"Let's just look at HANO and all  the very valuable property that they have in some of the highest property value areas of the city, sitting fallow and off the tax rolls," said Head. "Constance Street, Tchoupitoulas, Lower Garden District, Central City, Irish Channel - if you just look at those areas, they probably own $10 million worth of property that is contributing in no way to the health of the city…Encourage all the governmental entities such as HANO and NORA to sell their properties that are sitting vacant and blighted off the tax rolls."

HANO Executive Director Gregg Fortner issued the following in response to Head's comments:

"HANO was returned back to local control on July 7, 2014 after 12 years of federal receivership. We are currently researching potential development opportunities and the most productive strategies for our scattered site properties, and are committed to making sure that we are involved in the affordable housing strategy for the City of New Orleans."

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