Auditor questions property tax bills

Tax panel disagrees, cites misinterpretation of law

The Louisiana Legislative Auditor’s Office said Monday a state commission needs to do a better job ensuring that property tax assessments for homes are accurate.

The auditor cited examples of property tax bills on similar homes in the same neighborhoods varying by 100 percent or more.

The Louisiana Tax Commission did not force assessors to make corrections even when its own survey found that assessments on 55 percent of homes in East Baton Rouge Parish and 50 percent of homes in Orleans Parish missed the legal target of 10 percent of fair market value, the auditor’s report said. The tax commission disagreed, saying the auditor misinterpreted the law.

“We found some homeowners who owed significantly more in property taxes than their neighbors, despite the properties having similar fair market values,” the auditor’s report states on residential property tax assessments.

As an example, the auditor pointed to two homes in the New Orleans Garden District included in a 2011 survey by the commission. Each home is roughly 2,800 square feet with fair market values of $569,000 and $562,400. Yet one homeowner received a property tax bill of $8,534.47 while the other homeowner’s bill totaled $2,469.72 in 2012, which is roughly a 246 percent difference, because their assessed values dramatically vary.

The legislative auditor declined to divulge the street addresses for the properties, but recommended that the commission take a firmer approach with assessors.

Orleans Parish Assessor Erroll Williams said erratic, inequitable values are why his parish moved to a single assessor. He said the data mined for the auditor’s report stemmed from the last year Orleans Parish had seven municipal districts for property assessments.

“The problem of fairness identified in the report is what my office has spent the last two years trying to fix,” Williams said. “We’re making significant progress towards leveling the playing field.

However, the Louisiana Tax Commission, which oversees parish tax assessors, fired back by accusing the auditor of using visual gimmicks. The commission said in a written response that a higher-valued home could have a swimming pool or a gourmet kitchen, while a lower valued home could have termite damage or unrepaired storm problems.

The audit was “performed with a lack of understanding of the appropriate legal and factual background, or, even worse, with a predisposed intent to find fault where none exists,” the commission replied.

The commission rejected four of the auditor’s five recommendations, agreeing only on a point about identifying property owners who are claiming more than one homestead exemption.

Throughout the year, the legislative auditor looks at government financial practices, sometimes suggesting changes.

For the report on the Louisiana Tax Commission, the auditor attended the group’s public meetings and looked at 6,551 properties reviewed by the commission for a 2011 survey.

The auditor found that:

  • Thirty nine percent of properties were not assessed at 10 percent of their fair market value.
  • Parishes were not directed to reappraise properties that missed the target.
  • The commission approved $118 million in assessment decreases and $10 million in increases between 2010 and 2012 without checking for accuracy.
  • The commission did not ensure that tax assessors followed the law and reappraised homes every four years.
  • Twenty one percent of properties in 33 parishes had the same fair market value in 2012 as in 2007. The highest percentage of those were in Madison, Ouachita and Ascension parishes.

“According to one recently elected parish tax assessor, some of the residential properties in his parish had not been reappraised for over 30 years,” the auditor wrote.

In its response, the commission said it defies belief for an assessor to admit to “such malfeasance.”

The commission, which consists of five members appointed by the governor, said assessors are told which properties are out of range on fair market value and that a change might not always be made if the property value only slightly increases.

On the assessment decreases and increases, the commission said the average amount of money involved was $50 in taxes.

East Baton Rouge Parish Assessor Brian Wilson said a 2012 reassessment of property in his parish resulted in a $180 million increase in assessed value, $100 million of it from reassessments and $80 million from new construction.

He said mass appraisals might not hit the mark exactly but come pretty close.

“It’s never going to be perfect. We try to get in that range,” Wilson said.