Property Tax Comps: “Caddo, We Have a Problem …”

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ill_windsby Elliott Stonecipher

Property tax winds are blowing yet again in Shreveport and Caddo, now from our Caddo Parish School Board. To put such taxation in context, this report contains new research comparing taxes in Caddo / Shreveport to other areas in Louisiana, Arkansas and Texas.

The administration and board are now at work deciding when to schedule their move, and what to put on the ballot when they do. A mix of renewals are coming due before we know it, and an early CPSB miscue could taint them all.

Caddo Superintendent
Caddo Superintendent Goree

New Superintendent T. Lamar Goree is off to a positive, hopeful start, with perhaps several new school board members also coming aboard in November / December elections. Regardless, a “Give us the money!” tax renewal campaign would dash hope of reform.

(As I explained during the recent Caddo Commission tax renewal campaign, 2-in-3 households in Caddo Parish do not pay any property tax.* Regardless, and in a classic demonstration of taxation inequality, everyone registered to vote is permitted to vote higher property taxes on the few who actually pay them.)

Given that Caddo Parish property taxes are much higher than elsewhere in Louisiana and a lot of other places, I note that such is particularly true for Shreveporters, who are nearly 80% of the Caddo Parish population. My property taxes are typical of those “in the city limits,” a total of 175.06-mills. Included are 31 separate millages paid to 10 different city and parish governing / taxing agents.

The CPSB receives most of this tax, 75.66-mills, or 43.2%. The City of Shreveport takes 39.70-mills (22.7%), and parishwide taxing bodies other than CPSB take 59.70-mills (34.1%).

Details Behind the Whopper CPSB Property TaxExploding Potato

By enrollment, our Caddo Parish public school system is third-largest in Louisiana. With 2012 enrollment of 41,239, only the East Baton Rouge and Jefferson Parish systems are larger, with 42,334 and 45,661 students, respectively. (All related data is from the Louisiana State Department of Education website.)

Our local revenue contribution to public schools is property-tax weighted, with our 75.66-mill levy 44% higher than EBR, and 70% higher than Jefferson Parish.

The “total taxable property value” – meaning the value of property after subtraction of all exemptions – is the calculation base, and Caddo’s is far lower, yielding much less revenue. That total value is $1.672 billion in Caddo, but $3.704 billion in EBR, and $3.389 billion in Jefferson Parish. (Data from 2013 Louisiana Tax Commission Annual Report, Page 44.)

Our sales tax revenue is also lower: Jefferson and EBR have a 2.00% dedicated public school sales tax. Caddo’s is 1.50%.

Property and sales tax revenue are, of course, local funding sources for CPSB, contributing 43.2% of CPSB’s revenue per pupil in FY 2012-2013. The combination of state and federal revenue contribute remaining revenue, totaling nearly $470,000,000.

wind-storm-lightening copyThe Bigger Picture of Self-Defeating Taxation

I hope and trust that our parish and city taxers are beginning to understand that weighting taxation so disproportionately toward property owners has proven self-defeating, in every way. Put simply, many more – not fewer – taxpayers are needed, and we are instead repelling them. Now, especially with the metro economy about the worst in the nation, higher property taxes cannot remedy our lingering – if not worsening – economic problems.

We should note, too, that Shreveporters will soon be paying some of the highest water and sewer rates, and that the attraction of “no state income tax” Texas is rising. That is, after all, only a 10-minute drive away.

None of these facts have mattered to those elected and other public officials who have such responsibility. As comparisons below reveal, Caddo Parish refuses to compete for those taxpayers … be they north, south, east or west of us.

Personalizing Your Understanding of Caddo’s Much Higher Property Tax

For homeowners, there is no more powerful way to learn and understand Caddo Parish’s disproportionate dependence on property tax than for taxpayers to (a) confirm precisely what and how much such tax they pay each year, and (b) compare that with the same, as nearly as possible, residence in another place. (For further details about how to do this checking, see the footnote ** below.)

The following is what I learned about 2013 property, sales and state income taxes in Caddo, compared to a random selection of other places. Notably, comparable homes in many of these markets cost less than here.

All such comparisons vary according to each homeowner’s financial circumstances, home value, state income tax owed, etc., etc.

In Bossier City, the property tax on a home directly comparable to my own paid one-third – 32.8% – lower property tax.

In northern DeSoto Parish, a comparable home, but two years “newer,” paid a two-thirds – 68.2% – lower property tax. (Compared to my 175.10-mills property tax, the homeowner in North DeSoto pays 100.9-mills, with no “city” property tax.)

Monroe – a directly comparable house was taxed 12% lower, 86.8%, but the Monroe sales tax is 9.99% compared to our 8.6%.

West Monroe – a comparable home, two years older, was taxed almost one-half – 45.0% – lower than mine. The sales tax is 9.5%.

Baton Rouge – a directly comparable home was taxed 39.5% lower. Their sales tax is 9.0%.

Lafayette – a comparable home, two years older, was taxed one third – 34.3% – lower. The sales tax is 8.0%.

In New Orleans, with no comparable homes now on the market, I used the “Tax Estimator” provided online by Orleans Parish assessors. Compared to my home, the tax is estimated to be 17.9% lower. The sales tax is 9.0%.

Mandeville – a comparable home was taxed more than one-third – 37.6% – lower. The sales tax is 8.75%.

Texarkana, Arkansas – a comparable home was taxed 55.7% lower. The sales tax rate is 10.25%. Arkansans also pay a state income tax, the top marginal tax rate of which is 7% for income above $35,599.

Tyler, Texas – a comparable home was taxed 9.9% higher, but total taxation is lower. The sales tax is 8.25%. Among various homestead exemptions are $15,000 from the public school property tax, plus $25,000 for those Over 65. Texas has no state income tax. Paying a 10% higher property tax, but no state income tax, would net me just under $4,000 per year. I qualify only for the general homestead exemption. Sales tax savings are not calculated.

Sunnyvale, Texas – a comparable home was taxed 10.8% higher, with lower total taxation.  The sales tax is 8.25%, and Dallas County property tax exemptions are shown here.  My net tax savings, with no state income tax, would be just over $3,500 per year, with – again – only the general exemption.  Sales tax savings are not calculated.

Frisco, Texas – a directly comparable home was taxed 9.0% higher, with lower total taxation.  The sales tax is 8.25%.  Property tax exemptions include $15,000 for school taxes, and $60,000 for those Over 65.  With only the general exemption, my net annual tax savings with no state income tax would be a bit over $3,500 a year, plus sales tax savings.

In coming months, the CPSB will announce its overall strategic plan, tax consequences included.  Armed with deep, historical experience with the CPSB and its finances, I urge the system to “right-size,” matching its actual need for facilities and employees with its present and projected enrollment “size.”

Unless and until that happens, the confidence of the property-taxed public will remain low, at the very best.

Elliott Stonecipher

Elliott Stonecipher’s reports and commentaries are written strictly in the public interest, with no compensation of any kind solicited or accepted.  Appropriate credit to Mr. Stonecipher in the sharing – unedited only, please – of his work is requested and appreciated.
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* The Census Bureau’s American Community Survey data tells us there are 98,284 households in Caddo Parish.  From its station, the Louisiana Tax Commission 2013 Annual Report, (Table No. 44, Page 40), tells us there are 56,629 “homesteads,” in Caddo, with 24,342 of those “100% exempt” from property taxes because the assessed value of their home is below Louisiana’s $75,000 homestead exemption.  So, of all 98,284 households, 56,629 own or are buying their homes, and 41,655 are in rented or otherwise non-owner occupied homes.  Then, among the 56,629 homeowners, 24,342 are exempt from property taxes.  Remaining are the 32,287 property tax-paying homesteads.

** To begin, know the age, notable features and size – in square feet – of your home.  Your research then seeks to match, as specifically as possible, those facts, in any location of interest to you.  There are, however, no exact matches, and the older the home is, the less exact a comparable home is likely to be.

Next, go to a realtor website to find best matches.  When such a house is found, see if the website shows the annual property tax paid on the house, and see how much more or less the property tax is there than here.  It is wise to note all disclaimers on any site which provides property tax data.

Property taxes are most likely found on national realtor websites, but the back-up, in any case, is the tax assessor or “appraisal district” website for the parish or county to which you are comparing.  Once that website is found, go to the “property search” engine within that site.  You will search by property address, and the website will note the precise way that address must be entered to find the target property.

At least in the case of Louisiana comparables, a back-up to the local assessor is the Louisiana Tax Commission website.
  Click on the “Parish Tax Rolls” feature to go to the same property address search engine that parish assessors employ.

It is important to note throughout such research that “market value” and “assessed value” are different, and some tax assessors set assessed values notably lower than do others.  (For example, the assessed value of my home is 93% of the market value, with the latter being generally determined by most recent sales of most comparable homes in my own neighborhood.)  You should not need to deal with such variables in this search.

Note that property taxes are always much lower where fewer levels of government – i.e., fewer taxing agents – exist.  For example, houses “out in the parish / county” do not pay city / municipal property taxes.

Note, also, Louisiana’s higher-than-most homestead exemption of $75,000.  While states / counties vary widely in property exemptions granted to homeowners, our general exemption in Louisiana of $75,000 is notably high.

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