LABI Board Supports Two Proposed Constitutional Amendments
(Baton Rouge, LA) — Today, the Louisiana Association of Business and Industry (LABI) announced that the LABI Board of Directors recently voted to support two proposed Constitutional Amendments that will be on the ballot on November 2, 2010.
LABI SUPPORTS PROPOSED CONSTITUTIONAL AMENDMENT NO. 4 – PROPERTY MILLAGE RATE INCREASES BY NON-ELECTED BODIES.
Under current law, in reappraisal years local property tax millage rates are required to be “rolled-back” following an increase in property values. Thereafter, each local taxing authority, by two-thirds vote, may “roll-forward” its millages back up to the maximum approved millage rate. Act 542 of 2009, if approved by the electorate, would restrict the roll-forward procedure of certain non-elected bodies by allowing a roll-forward of millages of only 2.5 percent of the prior year’s property tax collections. Any further increase in millages would require a vote of the people. This would be a positive first step in the property tax system and benefit all payers of property tax, including homeowners and businesses.
If the amendment fails, millages could continue to be rolled forward to the maximum authorized rate allowed by local law. This can be done with a two-thirds vote of the taxing authority following a public hearing but does not require voter approval, even if the property tax increase is substantial.
Taxing bodies that would not come under this new provision include special fire protection or fire department districts; port, port harbor and terminal districts; and levee districts created before January 1, 2006. Additionally, taxing bodies that are elected would continue to be limited only to the maximum authorized millage rate.
LABI SUPPORTS PROPOSED CONSTITUTIONAL AMENDMENT NO. 6 – LEGISLATIVE VOTES FOR RETIREMENT BENEFIT CHANGES.
Currently, some retirement systems may change the benefits for their retirees without legislative approval, and the Legislature may increase benefits with a simple majority vote. This proposed amendment would mandate legislative approval, with a simple majority vote, to change the benefits of any public retirement system that is subject to legislative authority. It would also require a two-thirds vote of the Legislature when a proposed benefit change, such as cost of living increases (COLA) has an actuarial cost to the state. Louisiana has four state retirement systems as well as nine statewide systems.
The latest calculations estimate that the unfunded accrued liability (UAL) for the retirement systems is more than $16 billion. If the Legislature doesn’t start reining in these UAL costs, it will continue to be an ever growing burden on the state budget.
The November ballot will have 10 proposed amendments; LABI’s board took no position on the remaining eight.
“LABI is supporting two proposed Constitutional Amendments that would, if passed, provide additional protection for taxpayers,” said Dan Juneau, LABI President. “They inject transparency and accountability into local property taxation practices and public retirement system benefit changes that impact the state budget. When officials, elected or not, want to impose an additional tax burden on citizens, they would have constitutional limitations that now do not exist,” he said.