Tax protest shorts CATS half-million dollars

Taxes withheld pending litigation

The Capital Area Transit System will be shorted about half a million dollars this year, as a result of this year’s crop of property owners who requested their taxes be withheld from the bus system until pending litigation against the tax is settled.

The East Baton Rouge Parish Sheriff’s Office reported 1,207 taxpayers submitted requests that their tax payment be held in escrow. The combined value of the taxes they owe is $463,355.

The number of people protesting their CATS tax is similar to that of the previous year, when 1,299 people filed to hold their taxes, amounting to $470,278. That means in total, CATS is missing out on $933,633 in owed tax dollars.

Businessman Milton Graugnard filed suit after the CATS tax passed in April 2012, challenging the constitutionality of the election.

He seeks to void the tax entirely on the basis that the tax was levied within the city limits, yet some areas outside the city limits, such as the Mall of Louisiana and Perkins Rowe, are receiving bus service without having to pay a tax.

The 1st Circuit Court of Appeals dismissed the suit last month on a filing date technicality; however, Graugnard’s attorneys are appealing that decision to the Supreme Court.

A state statute allows taxpayers to pay their property tax bills “under protest” in the event pending litigation could ultimately void the tax. The lawsuit has been ongoing for more than two years.

If the courts ultimately rule in CATS’ favor, the funds will be released to the agency. If the courts rule the tax election was unconstitutional, only those who filed to hold their taxes will receive their money back.

CATS CEO Bob Mirabito has said the agency did not appropriately budget for funds withheld from the tax protest, assuming it would win the lawsuit by now.

But he has said a half-million-dollar budget shortfall is manageable, and will not affect services.