At least one BREC commissioner is opposed to BREC’s desire to “roll forward” the park system’s property tax millage rate to the maximum allowable 14.463 mills, up from its current 13.72 mills.
Commissioner Bill Scheffy says the agency is flush with reserves that have built up over the years by virtue of rising property values, which have outpaced the rate of inflation—in most recent years by a margin of two-to-one.
Now that Baton Rouge, like much of the country, is experiencing a housing boom, 2021 should generate even greater ad valorem tax revenues for governmental agencies, which Scheffy says is all the more reason to hold off on a roll forward.
The commission is scheduled to vote later this month on BREC’s millage “roll forward” request.
“Baton Rouge has been growing, even if just slightly, and real estate values have been growing so the total assessed valuation is going to go up anyway,” says Scheffy, who says the same millage rate that generated $48 million for BREC in 2011 generated some $65 million in 2019, which represents an average annual increase of around 4%.
During those years, the rate of inflation was 2% or so per year.
With the current housing boom, those assessed valuation numbers will likely increase even more next year. Consider: The median home sale price in Baton Rouge increased more than 9% from January to May, compared to the same period in 2020, while the number of homes changing hands during that period jumped nearly 39%, according to the Greater Baton Rouge Association of Realtors.
Because properties are assessed based on their most recent sales price, which is automatically recorded at the time of closing, a lot of homes are going to be on the books at a higher assessment rate come 2022.
“People need to understand that the idea of rolling, or adjusting, millages was not to give governments a windfall every four years when property values are reassessed,” he says. “It was done to prevent them from getting windfalls.”
BREC officials say they’re not looking for a windfall but are trying to collect the maximum allowable amount of tax revenues they’re due, after rolling back their millage rate in 2020, which was a reassessment year.
At the time, the agency said they wanted to give taxpayers, hit hard by COVID, a break.
Now, the agency says it needs to roll its rate forward, which will generate an extra $3.7 million in year one, in order to help pay for improvements to Greenwood Park and the Baton Rouge Zoo.
“It’s going to take every dollar we have and then some to get some of these projects completed,” BREC spokesperson Cheryl Michelet says. “And, because of supply chain disruptions and cost increases we added $6 million to the zoo project budget so those are some of the things we’re dealing with.”
The increase could generate even more than an additional $3.7 million for BREC. East Baton Rouge Parish Assessor Brian Wilson says a preliminary calculation of the 2021 tax rolls shows the total taxable value of property in the parish increased to $4.9 billion in 2021 from $4.8 billion in 2020.
That’s only a 2% increase but Wilson says the figures are not final yet and could change.
What’s more, given the current upward trajectory of home sale prices and activity in Baton Rouge so far this year, property taxes will generate a lot more for BREC and other governmental entities in 2022.
“I’m not against rolling forward when you have to keep up with inflation,” Scheffy says. “But, when you’re outpacing inflation by as much as BREC has been, that looks like a windfall to me.”