Louisiana Voice

By Robert Burns

(Special to LouisianaVoice)

In the 10 years immediately prior to my December 31, 2012 retirement, I held a real estate brokerage license in Louisiana primarily because the only thing I auctioned in my auction career was real estate.  During that time, I took numerous real estate courses and one thing that was repeatedly emphasized regarding property taxes in Louisiana was that “Orleans Parish is a whole different animal.”

LouisianaVoice readers may recall that, prior to Hurricane Katrina, Orleans Parish was unique in that it had seven assessors, each overseeing a different taxing district in New Orleans.  Orleans Parish already receives its taxes one year in advance while all other parishes collect at the end of the year.  In other words, Orleans Parish is already living on borrowed time.  Many changes were advocated after Katrina, and one proposal was the consolidation of those tax assessors into one.  It required an amendment to Louisiana’s Constitution, which overwhelmingly passed on a statewide vote in November of 2006.

LouisianaVoice has learned that considerable frustration and consternation has ensued among many Orleans Parish taxpayers since Orleans Parish Assessor Erroll Williams became the first parish-wide solo assessor in Orleans Parish and was sworn into office in January of 2011.  Before addressing these taxpayer frustrations, however, a brief primer is necessary regarding property tax appeals in Orleans Parish.

Let’s begin with the hypothetical taxpayer who receives notice in the mail from Williams’ office that his property value has been reassessed to a value significantly higher than the taxpayer believes can be justified.  First, those reassessments in other parishes in Louisiana occur only every four (4) years as per Louisiana’s Constitution (the next year for reassessment is 2016); however, LouisianaVoice has learned that a significant number of taxpayers in Orleans Parish are receiving reassessments throughout the four-year timeframe.

One taxing official spoke with LouisianaVoice and relayed that Assessor Williams justifies the practice of annual reassessments by virtue of the fact Louisiana’s Constitution states such assessments shall take place “at least” every four years.  Some irate Orleans Parish taxpayers, however, have suggested that Assessor Williams is engaging in a practice called “sale chasing,” in which his office learns of a property that sells on a given street, and then he begins reassessments of other properties in the same vicinity immediately.

Taxpayers have the right to file an appeal of assessments. To use a judiciary analogy, let’s consider Assessor Williams the judge who rendered his ruling. Unhappy with the ruling, the litigant appeals. In the case of a legal case, it would be the appeals court who would hear the appeal. For an Orleans Parish property tax appeal, it is the New Orleans Board of Review that hears the appeal. Who is the New Orleans Board of Review? It’s the New Orleans City Council (NOCC). So, in the legal analogy, the NOCC is the appeals court.

This is where things become interesting. The NOCC is literally flooded with appeals of property tax notices every year; furthermore, the NOCC lacks the technical expertise to ascertain whether the taxpayer or Assessor Williams is correct in the asserted value. Accordingly, for years, the NOCC has contracted out with a firm named Hammerman and Gainer (HGI) to ascertain a valuation and see if an agreement can be reached between the taxpayer and Williams.  LouisianaVoice noted that, after obtaining sizable contracts post-Hurricanes Katrina and Sandy (likely due to political connections and contributions to the campaigns of Gov. Jindal and New Jersey Gov. Chris Christy), the New Jersey Sandy contract was cancelled six (6) months later due to substandard performance. https://louisianavoice.com/2014/12/31/louisianavoice-2014-year-in-review-part-dieu-it-just-gets-weirder-and-weirder-as-we-barrel-with-abandon-into-2015/

HGI subcontracts with licensed real estate appraisers to ascertain a valuation for the appellant. By subcontracting its work and not doing its own appraisals, HGI is adding a layer of cost to the process. Once HGI obtains a valuation from the appraiser, a mini-appeal hearing of sorts transpires with Williams, the taxpayer and HGI. It is unclear how many cases are resolved at this level, but what is known is that a substantial volume of cases winds up in the hands of the NOCC (serving as the first appeals court in our legal analogy) to resolve.

At an NOCC hearing, spreadsheets are distributed among council members, and they literally make an up-or-down vote on literally hundreds of these tax appeals after any individual recommendations are discussed regarding whether to go with HGI’s appraiser estimate or Williams’ valuation. LouisianaVoice has learned that, historically, the NOCC typically has sided with the HGI valuation from the appraiser rather than Williams’ valuation.

Once the decision is made, the NOCC is responsible for notifying both Assessor Williams and the taxpayer of its decision. The taxpayer is notified by certified mail, and NOCC has historically notified Williams via email (which Williams admits) with the entirety of its decisions from the meeting.

What is critical, however, is the timing of notification: By Louisiana Statute, both Williams and the taxpayer have 10 days from receiving notice to appeal the NOCC decision to the Louisiana Tax Commission (LTC) who, to carry our legal analogy a step further, serves as the Louisiana Supreme Court in that their decision typically constitutes the end of the matter.  However, if a taxpayer is still dissatisfied with the LTC’s decision, he can seek judicial review in a Louisiana District Court and simultaneously file a second lawsuit with the taxes being paid under protest.

Sources tell LouisianaVoice that, while taxpayers have been obtaining their certified mailings in a timely fashion, Williams’ notifications have consistently been delayed (one individual has stated the delays have been at Williams’ urging) until after the taxpayers’ 10-day appeal window has closed. Remember, the NOCC has historically tended to favor HGI’s (i.e. the appraiser’s number) which has been in the taxpayer’s favor and not Williams’ favor.  So, the taxpayer gets a warm and fuzzy feeling that everything is over and he can move on with his life because the 10-day window (from when he received notice) has passed.

Well, not exactly.

Sources tell LouisianaVoice that the fact that Williams’ notice has historically been delayed until after the taxpayer appeal period has lapsed has provided him with a “double-secret appeal” window, and he has exercised his appeal rights to the LTC.  The following table derived from stats provided by the LTC would seem to bear this out.

Now the taxpayer is notified of a third hearing (including the mini-hearing with HGI). This hearing is in Baton Rouge before the LTC.  Worse yet, the taxpayer who thought everything was okay suddenly finds that he is literally among hundreds of other taxpayers, all of whom have traveled to Baton Rouge to have their cases argued before members of the LTC which faces a crowded docket, thanks to Williams’ appealing so many Orleans Parish taxpayer assessments.

Worse yet, Williams reportedly sends no representative to the LTC hearing to defend his office’s valuation, nor is any evidence put on to support his valuation, the same tactic he uses in cases heard at the NOCC appeal hearings as well. Using the legal case analogy, this would be akin to an attorney filing an appeal with the Louisiana Supreme Court and then declining to attend the court’s hearing to argue his points.

Accordingly, the LTC has little choice but to rule in favor of the taxpayer and that concludes the matter. The result is significant time, energy, and financial resources shelled out by the taxpayer all to wind up where he was before Williams began this whole process, which some have characterized as a blatant abuse of power on Williams’ part.

Nevertheless, a certain number of taxpayers either just give up or accept Williams’ assessment (and that may well be exactly what he’s banking on with the theory that some money gained is better than none).  Obviously, to the extent some taxpayers opt not to appeal to the LTC, the result is in fact increased revenues for the City of New Orleans.

As a result, some New Orleans power brokers reportedly are demanding that notifications be sent by the NOCC simultaneously to taxpayers and to Williams (thus eliminating Williams’ double-secret appeal window). A NOCC high-level staffer confided that he is now “personally hand delivering” the spreadsheet nearly immediately after the NOCC approves the valuations.

Nevertheless, like many public officials who don’t like an infringement upon their fiefdoms delay notifying Williams (again, said to be at Williams’ urging). Williams sought an opinion from Attorney General Buddy Caldwell’s office regarding when the NOCC is required to send notifications. Assistant Attorney General Emalie Boyce released this Louisiana AG’s Opinion on the matter on November 24, 2014, which said that notification must transpire contemporaneously or “within the same period of time.” Thus, Williams’ tactic has effectively been eliminated.  Further, by the wording of the opinion, it appears that Williams blames the NOCC for the delay in notification to him and also criticized the NOCC for merely sending email notice rather than certified mail notice (the AG opinion states certified mail is required).  Interestingly enough, when we spoke with the NOCC staffer, he had no idea Williams had even requested the opinion, much less that one had been released by the AG’s Office.

Orleans Parish property tax appeals by Williams for 2014 are down substantially (dropping from 421 in 2013 to only 33 in 2014). LouisianaVoice delved extensively into the reason for the decline by making inquiries of numerous sources providing us with information for this article. Those sources, including the NOCC staffer, relayed that the huge decline is attributable to one at-large councilman who, sensing an opportunity to shore up New Orleans’ finances, acquiesced to Williams’ valuations for 2014 rather than the HGI, appraiser-backed valuations. Thus, Williams has essentially been left with nothing to appeal (at least for 2014) given that his valuations, in an about-face by the NOCC for 2014 vs. prior years, have largely been upheld by the NOCC.

Now, while conducting research for this article, LouisianaVoice was informed by an individual with extensive knowledge of the process that it would be “quite revealing” to seek the legal expenses of the Orleans Parish Assessor and to view copies of litigation initiated against that office over the last several years. Accordingly, we made public records requests of Williams’ office for those records, only to have him attempt to “educate” us on Public Records Laws in that, Louisiana Statutory rate of $0.25 per page notwithstanding, Williams relayed that “our rate is $1 per page.” Again, without citing a Louisiana Statute, we were informed that we’d be responsible for paying all personnel costs for redacting out “attorney-client privileged information” (including the bizarre inclusion of material stated to be in the lawsuits themselves, which are already public record for the world to see!).

We decided that, since Williams is so willing to educate us on Louisiana’s Public Records laws, we’d offer him an opportunity to educate us on a few other matters, such as whether his office attends appeals hearings and, if so, whether his office puts on any evidence in support of his office’s valuations at those hearings. Williams, apparently miffed at our line of questioning, fired off this letter dated January 5, 2015 which said our inquiries were not public records requests (we never asserted that they were but merely relayed in writing that he could feel free to further educate us) but rather “interrogatories,” to which “no answer will be forthcoming to your interrogatories.”

It appears as Jindal’s term nears its end, so too may have the HGI contract to handle Orleans Parish property tax appeals.  Our contact at NOCC said HGI’s status for 2015 is “unclear.”  When we added we’d sent public records request to their New Orleans post office box, he said, “I think you’ll find they’ve quit manning that P. O. Box.”  Another source, when told of our public records request of HGI said, “It’s probably better I not say anything.”