New Orleans City Council Special Meeting: Raising Property Taxes Under Consideration

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After several days of negotiations over how to balance New Orleans' 2011 budget, Mayor Mitch Landrieu and the City Council have agreed to raise property taxes by nearly 8 mills and double the monthly sanitation fee charged to households and small businesses, the mayor announced early Tuesday afternoon.

The parties also agreed to dedicate revenue from 2 mills of property tax -- about $5.3 million -- for the city's Recreation Department, once a revered institution that has suffered from underfunded for decades.

The council has called a special meeting for 9:30 a.m. Wednesday to introduce the additional revenue-generating measures and to schedule a special meeting for Saturday to vote on the property-tax hike.

When the council adopted the city's 2011 budget on Dec. 1, it voted to raise taxes by 6.74 millls, 2 mills less than Landrieu had proposed. The latest agreement splits the difference, raising the property tax to 7.74 mills.

At last week's meeting, the council also voted to raise the sanitation fee from $12 a month per household to $20 a month, as proposed by Landrieu, but said it intended to boost the fee to $22 in January, as soon as allowed by law.

Members apparently have now decided to raise the fee to $24 a month. The new price for small businesses will be $40.

"The new budget we have agreed upon is fiscally prudent and structurally sound," Landrieu said in a prepared statement. "The millage funds what the people want and need - street and drainage repairs, blight reduction and public safety. The sanitation fee is now more in line with the actual cost of picking up garbage. We must get back to sound fiscal practices and pay for services as we go."

A measure to hike the sanitation fee will be introduced Wednesday but cannot be voted on for 20 days.

The 7.74-mill increase in the current millage rate would bring in nearly $21 million, still $2.7 million less than Landrieu initially sought. The council has said it would make up that difference from other revenue sources, including increasing the sanitation fee even more than Landrieu proposed.

Councilwomen Stacy Head and Jackie Clarkson said they wanted to scale back the millage increase even further but could not gain support from a majority of their colleagues.

The extra mill in property tax would replace a planned increase in the city's excise tax on commercial parking lots and garages. The council had intended to raise that tax but now has decided against that idea. The revenue from 1 mill of property tax would be about the same as the parking tax was expected to generate.