Phone lines lit up the second and fourth floors of City Hall Monday as frazzled homeowners across New Orleans started to receive unwelcome letters warning them that their home values had been recalculated for tax purposes – drastically, in many cases.
Precisely how the new property assessments compare to the old ones is unclear since the numbers won’t become public until Wednesday.
But several assessors have released preliminary data showing steep average increases. For example, 6th District Assessor Nancy Marshall has said the value of residential property in her Uptown district will see an increase of 68 percent on average. Marshall said she believes other districts may go up even more.
News of the hefty increases left a sour taste in the mouths of many homeowners. Some complained that the jumps — which will almost certainly mean higher tax bills for some, though the tax rate has not been set yet — come at a time when many New Orleanians are grappling with increases in other post-Katrina expenses, including utilities and insurance.
Among the disgruntled was Freddie Guess, an artist and gallery owner who just received word that the valuation on his Garden District home had jumped from $267,500, the price he paid for it in 2001, to $780,000.
“My income has dropped from my gallery, and now I must pay a $10,000 increase in city property tax,” Guess said in an e-mail. “I expect this could be the last straw for many people struggling to survive. I just wonder what is going to happen to the real estate market this coming week when all the new listings come onto the market.”
Guess said an appraiser valued his home last year at $590,000; he suspects it’s fallen somewhat since then.
The drastic changes in the assessments, which will be used to calculate 2008 tax bills due in January, represent the culmination of a turbulent period for the city’s seven assessors.
A series of stories in 2004 in The Times-Picayune documenting inequities in property valuation led to a study by the state Tax Commission, which had similar findings. Both reports found that properties that hadn’t changed hands for a long time were apt to be astronomically undervalued for tax purposes.
As a result, the commission ordered a reappraisal of all residential property that was originally due last year. That review was postponed for a year because of Katrina.
As it happens, the quadrennial reassessment that is mandated by the state constitution is also due this year. So the reappraisals now landing in area mailboxes are supposed to reflect both the appreciation in property values of the last four years and, in some cases, the previously overlooked appreciation of several decades.
Adding further to the sticker shock faced by some is the fact that 2007 assessments on some residential properties were lowered significantly to account for storm damage caused by Katrina.
The new assessments are also the first ones to come out since local voters cast ballots overwhelmingly in favor of a constitutional amendment to consolidate New Orleans’ seven assessors’ offices — a system unique in the country — into one.
The change, which was also endorsed by state voters, will not take effect until 2010. In the meantime, it has essentially transformed the seven assessors into lame ducks.
Uptown voters also signed on for reform by putting Marshall into office. She was the only winner out of a slate of seven candidates who pledged to refuse their salaries and work for the elimination of their offices upon victory. Marshall has upheld both pledges.
But even if there is a rationale for the new assessments, that doesn’t mean that homeowners will like them. A number of those who contacted The Times-Picayune on Monday said they believe the new assessments will hasten the city’s decline.
“I bought my house in 2000,” wrote Scott Childs, who lives Uptown on Baronne Street. “My assessment has increased by 2 ½ times my original purchase price. Who wants to buy my house for Nancy Marshall’s asking price?”
Childs’ 2007 valuation of $285,000 has been adjusted to somewhere north of $600,000, he said. Realistically, he thinks the house is worth $475,000.
Dozens of anxious homeowners phoned their City Council representatives with questions and complaints Monday, with the bulk of the calls going to the offices of Stacy Head in District A and Shelley Midura in District B.
Together, Head and Midura represent many of neighborhoods that did not suffer serious flooding, including Uptown, the Garden and Warehouse Districts and parts of Mid City.
Meanwhile, the offices of Cynthia Hedge Morrell and Cynthia Willard-Lewis, who represent the hardest-hit areas of the city, including eastern New Orleans, Gentilly and the Lower Ninth Ward, reported that they hadn’t received a single call about property tax assessments.
A spokeswoman for District C Councilman James Carter, who represents the French Quarter, Algiers, Bywater and Faubourg Marigny, said his office had fielded about a dozen calls.
Borrowing a quotation from former Gov. Huey Long, Head said the reaction by many to the revised assessments was predictable.
“One of these days the people of New Orleans are going to get good government — and they aren’t going to like it,” Head said, substituting the city in place of Long’s reference to the state of Louisiana.
But Head said homeowners must remember that while many homeowners who received steep increases in their assessments will doubtless get bigger tax bills, higher assessments do not automatically mean higher taxes.
State law requires the bodies that set tax rates to “roll back” millage rates to reflect the new assessments, so that reassessments don’t result in windfalls for tax-recipient bodies. However, in cash-starved New Orleans, political entities have historically “rolled forward” the millages to their previous amounts immediately after rolling them back.
Head and Councilwoman Shelley Midura have said they both are committed to pushing for a substantial rollback in the millage, so that the city treasury doesn’t realize a disproportionate profit from the rise in assessments.
“The thing that we all have to understand is that the ultimate collection by the taxing bodies will not go up substantially because the millages will go down,” Head said. “Thus, we’re not increasing taxes by having fair assessments, we’re merely reallocating the burden to be more equitable and fair.”
The extent of any rollback will be up to the full council, which along with the Orleans Parish School Board and the Orleans Levee District is one of a handful of bodies that sets tax rates.
At this point, it’s not clear whether Midura and Head have the support of the majority of their colleagues. The matter is not scheduled to come before the council until Nov. 30.
To date, Mayor Ray Nagin’s administration, which is responsible for submitting the city’s annual budget to the council, has offered no comment on the issue of rising assessments. Twice in the past week, Nagin’s press office has failed to respond to questions about the mayor’s position.
Homeowners who believe that they have not been treated fairly by their assessors can appeal directly to their assessors. If they are not satisfied with the results, they still have the option to appeal to the City Council and ultimately to the state Tax Commission.
Beginning Wednesday and continuing through Aug. 15, homeowners who wish to challenge the new appraisals will be able to do so in person at their respective assessor’s office in City Hall or by phone.
Algiers residents must go to the Algiers Courthouse annex where the office of 5th District Assessor Tom Arnold is located. The assessors’ office hours are 9 a.m. to 4 p.m., Monday through Friday.
Marshall has decided to take the extra step of offering her constituents an option of discussing their assessments on weekends during the two-week review period. Marshall and her staff will be available Saturday and Aug. 11 from 10:30 to 4 p.m. at the Latter Library, 5120 St. Charles Ave.
Marshall, who said she personally handled more than 60 constituent calls Monday, said whenever possible she attempts to explain to constituents the methodology that led to her decision.
“To the extent that this is science, we look at square footage and comparable property values in the area,” she said. “Now, obviously, a house on Audubon Place is different than one on Versailles which is different than a house on Pine Street.”
She said some homeowners have suggested that the assessment increases should be implemented incrementally.
“When that happens, I tell them I can show them what property is selling for in their neighborhood,” she said. “If they think there is a huge discrepancy, I’m willing to take a look at it.
“Part of the concern is that some of the other (assessor) districts aren’t doing what they’re supposed to do. Well, I can’t not do what I’m supposed to do just because they’re not doing what they’re supposed to do.”
First District Assessor Darren Mire, who represents parts of Mid-City and the Lower Garden District, said he too has encountered resistance to his higher assessments.
“This is a very difficult time for many people who are dealing with rising insurance costs and other issues,” he said.
But like it or not, Mire said even flooded-out neighborhoods are experiencing a bump in value. For example, he noted that gutted homes in his district that he valued at $30,000 after the storm are now selling for up to $80,000 each.
“People are speculating. They’re flipping these houses,” he said, “and they’re still gutted.”
Gordon Russell can be reached at grussell (at) timespicayune (dot) com or (504)¤826-3347. Frank Donze can be reached at fdonze (at) timespicayune (dot) com or (504) 826-3328.
by Keith I. Marszalek, nola.com
