The gist: Total assessed property values in Lafayette Parish have fallen for the first time in decades, further compounding shortfalls in consolidated government’s upcoming budget. Linking the declines to economic fallout from the pandemic, Lafayette Parish Tax Assessor Conrad Comeaux said Thursday at a budget hearing the decline in property values could reduce LCG’s revenues by millions. That drop will force the City and Parish councils to either raise millage rates or cut their budgets further.
This is the first drop in total assessed values in 30 years. Normally, total assessed property values go up due to increased commercial property revenues, increased home values, and the growth of new development. But this is not a normal year. Commercial properties like hotels, office buildings and warehouses have shown declines in revenues related to the coronavirus fallout.
The loss of revenue could spell big trouble for the parish budget. The parish general fund is currently slated to end next year with a fund balance of just over $50,000. Comeaux anticipated a 6.6% revenue decline in property tax revenue, which would mean a loss of $206,000 in next year’s budget for the parish general fund. By law, the parish can’t operate a budget with a negative fund balance, meaning $150,000 in cuts would be needed to offset the reductions. When factoring in the parish’s various dedicated millages, the parish may lose a total of $3.7 million in revenue.
This would put a dent in city revenues, but the overall picture isn’t dramatically changed. The city’s general fund could lose $1.7 million in revenue, which would increase the city’s operating deficit on paper. Total city property tax revenue when factoring in dedicated millages could drop $2.3 million. With substantial reserves, city government operations could absorb the loss.
The councils could increase the property tax rates to make up the difference. Both the City Council and Parish Council have the authority to raise millage rates to offset this drop in total assessed property values.
Raising millages will increase costs for some property owners. If these millages are raised but the assessed value of your property has stayed the same, your property tax bill will go up. Given that Lafayette’s housing market is still holding relatively strong, it’s likely the assessed value of your home has not decreased. So many people will end up paying more property taxes. But despite some people paying more property taxes, neither the city or parish governments will receive more revenue.
This raises the stakes on an already-contentious budgeting process. The Parish Council has been wrestling with not having enough money to cover its costs. Parish government is also getting pressure from the new City Council to pay more of its share of operating LCG. Now the Parish Council will have to either raise property taxes to stay above water or somehow squeeze even more blood from parish finances.
Councilman Kevin Naquin asked that an ordinance be drafted to increase parish millages. At today’s budget hearing, after Conrad Comeaux shared this news, Naquin asked that an ordinance be drafted to increase millages, though he acknowledged uncertainty about whether his fellow parish council members would vote to approve it.