Louisiana lawmaker wants change in property tax

Published 12:00 am Sunday, February 22, 2009

BATON ROUGE (AP) — For more than a decade, state Sen. John Alario has tried unsuccessfully to change the way Louisiana homeowners are taxed.

His effort is a long shot again this year, but an Internet petition has given him some free publicity.

Alario plans to file bills this spring that would increase the state’s homestead exemption, the tax exemption that makes $75,000 of a home’s value free from property taxes.

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Louisiana’s exemption already is considered among the nation’s highest, but Alario argues other taxes — levies on sales and income — mean homeowners pay an unfair price to local governments that impose property taxes.

‘‘States like Florida and Tennessee have no income taxes, so in Louisiana we’re getting double-whammied,’’ said the Westwego Democrat, the Legislature’s senior member.

Raising voter awareness of the issue is Joshua Kahler, a Metairie real estate agent and property manager, who created an online petition urging the Legislature to raise the exemption to $170,000 — a figure he arrived at by calculating the effects of inflation since the $75,000 figure was put in state law. The list of signatures is growing: from 22,000 a month ago to more than 51,000 now.

Kahler said he hopes to distribute hard copies of his petition to lawmakers, in hopes of convincing them inflation has caused property tax increases since the homestead exemption was enacted in 1982.

‘‘The tax burden has in fact been shifting onto homeowners, because the homestead exemption has been allowed to diminish in the face of inflation,’’ Kahler said. ‘‘The real tax shift has been incurred by homeowners, and any adjustment to the homestead exemption will just correct it.’’

Opponents say Alario and Kahler have it all wrong. And key House members are prepared to block any homestead exemption increase once the legislative session begins in April. Opponents include the chair and vice chair of the House tax-writing committee, Reps. Hunter Greene, R-Baton Rouge, and Jane Smith, R-Bossier City.

Both Greene and Smith said a lot of homeowners — some of those that signed the petition — are mistaken if they think a higher exemption will mean lower property taxes. If the exemption goes up, they said, it could mean a huge tax increase for people whose homes are worth more than the new, higher homestead figure.

But Joe Sylvestri, a homeowner and farmer in rural West Carroll Parish, said he’d like to see the exemption doubled to $150,000. He said the value of his 60 acres has quadrupled since he bought the land in 1983, and his most recent property tax bill was about $350.

‘‘I know $350 isn’t a lot compared to some of these other people, but it’s a lot of money to me,’’ Sylvestri said. ‘‘Everything goes up, so the tax exemption should go up to meet the rising cost of an acre of land.’’

Rep. Frank Hoffmann, another member of the House tax committee, said he opposes the idea because it would trigger a jump in property taxes paid by businesses, which don’t benefit from the homestead exemption. If the exemption for homeowners rises, Hoffmann said, local governments will make up for the loss of tax revenue by raising property tax rates on businesses.

‘‘We’ve tried to make the business environment in our state better, and we don’t want to turn that around now,’’ said Hoffmann, R-West Monroe.

That’s the core of opposition from the Louisiana Association for Business and Industry, one of the Capitol’s most influential lobbying groups. LABI sent an e-mail this month urging its members to lobby lawmakers to oppose any increase to the homestead exemption, and warning of a $1.8 billion tax hike on businesses if it’s raised to $150,000.

‘‘Your legislators need to hear from you TODAY — don’t wait until the session starts, and don’t assume they will be with us,’’ said the e-mail from LABI president Dan Juneau.

Other opponents include school boards and local government bodies that don’t want Alario tinkering with their revenue.

Alario said he plans to file two similar bills in hopes one passes and is signed into law by Gov. Bobby Jindal. One would raise the exemption from $75,000 to $160,000; the other would raise the exemption annually by an amount tied to inflation.

One good sign for Alario: Timmy Teepell, Jindal’s chief of staff, said the administration will not oppose a bill with an annual increase tied to inflation.

Still, passage of either bill would be a long shot, and Alario said he’s aware opponents are lining up against him.

‘‘They’ve fought us in the past and I assume they’ll fight us again this year,’’ he said.