Louisiana Property Tax Information
Only six states have lower property tax rates than Louisiana. A big contribution to that low ranking is the state's homestead exemption enacted in the 1930s that protects the first $7,500 of property assessment from property taxes. For a home appraised at $75,000, its assessed value at 10 percent would be $7,500, meaning that the homeowner would pay no property taxes except for municipal levies, which are not covered by the homestead exemption. About 65 percent of the houses in Louisiana are exempt from property tax
Other People Are Reading
-
How the Government Gets Its Money
-
There is still a property tax in the state, but it is levied at different rates for different uses. Homes not completely covered by the Homestead Act pay the balance of the their assessed value in property taxes. Homes are taxed at 10 percent of fair market value, commercial buildings are taxed at 15 percent of property value and buildings used for public service are taxed at a 25 percent rate. The way it is calculated is based on appraised value, which is divided by 10 to determine an assessed value and then multiplied by the tax rate, known as millage. Each mill is one-thousandth of a dollar. The state doesn't collected property taxes, but municipalities, fire districts, school districts and special districts levy assessments. The state relies heavily on sales and income tax for its budget.
How Taxes Work
-
Millage varies from parish to parish (think county to county). Parishes set millage rates to meet budgetary requirements, and they are voted on by the taxpayers in the local communities. Parish assessors have the responsibility of overseeing the proper assessment of properties within their jurisdiction. Under Louisiana state law, all properties within a parish are supposed to be reassessed every 4 years in order to ensure accurate, up-to-date valuations and to prevent disparities between older and newer homes.
-
Roll Back
-
The Louisiana Constitution calls for automatic roll-backs of millage rates when assessments increase, which would result in revenue-neutral budgets. In other words, it would force taxing entities to live within their established budget. However, local taxing authorities may also hold a meeting to roll back the roll-back, which is often passed, based on increases in operational expenses, inflation and a myriad of other reasons or projects that a municipality or school district may want to undertake. The decision is up to the ruling tax authority and has been a matter of debate over the years. Some feel that to eliminate the automatic roll-back, the electorate at large should put the matter to a vote. This hasn't happened. There is also a built-in escalator. As new properties are added to the tax rolls, property values increase and the total assessed value of most parishes invariably creeps up as homes are reassessed.
Sloppy Bookkeeping
-
The Louisiana State Tax Commission is supposed to oversee the tax rolls to assure their accuracy, but a 2003 study by sister newspapers in Louisiana--The Picayune and the Morning Advocate--discovered significant discrepancies. In the Orleans Parish, it was found that home prices were 70 percent higher than assessed value, costing the government as much as $52 million a year. Good for the taxpayers, not so good for the government. The papers also found that recordkeeping in the East Baton Rouge Parish didn't distinguish between commercial and residential properties (except those with homestead exemptions). It also found that assessments were uneven by as much as 230 percent of identical homes.
Tax Increment Financing
-
Tax Increment Financing (TIF) is an innovative though somewhat controversial way to lure development to an area, thereby increasing employment and redevelopment of underutilized areas. In turn, the development would increase both the tax base and quality of life. TIFs finance private development using public money by foregoing taxes that a business would otherwise pay to the taxing bodies. Instead, once a business is established, the money is used to pay off bonds that have been floated by a municipality or area to create infrastructure favorable to development like roads, improved electric service, curbing, water and a host of other improvements to lure businesses to a targeted area. It's been shown in other areas to be a successful redevelopment tool. The effectiveness of TIFs in Louisiana remains unclear.
-
References
- Photo Credit New York City Skyline image by paolobenne from Fotolia.com
