OCTOBER 2023 AMENDMENTS 3 & 4: SIMPLIFIED

AMENDMENT 3 (FOR)

With HB 47 voters will be asked to decide whether to make increases in how state budget surpluses are spent on pension benefits for retired state employees. Surpluses occur when annual state revenues exceed spending. Of course, this is a desirable situation but not the norm. When it does happen, state law largely governs which worthy causes to spend money on and how much is to be spent.   For budget year 2024-2025, City Business reports that the projected surplus by government officials is appx. $143 million

An amendment passed 1988 is current law. It requires that at least 10% of any non-recurring surplus be used to fundof the Louisiana State Employees Retirement System (LASERS) and Teachers Retirement System of Louisiana (TRSL).  These payments, however, are scheduled to end in 2029.

2023 AMENDMENTS 3 & 4: SIMPLIFIED

Based on 2022 state actuarial reports, there are over 49,700 LASERS retirees and a whopping 82,600 in TRSL. Louisiana has 4 retirement systems that require funding –

• Louisiana School Employees Retirement System (LSERS 13,812)
• Louisiana State Police Retirement System (LSPRS 1,355)
• Louisiana State Employees Retirement System (LASERS)
• Teachers Retirement System of Louisiana (TRSL).  

Each is obligated to pay pension benefits to retirees, spouses or beneficiaries. Also 25% of any surplus is carved out for the state’s “rainy day” fund.

The combined unfunded accrued liability for these 4 state retirement systems exceeds $ 17 billion!  In simple terms, this is the gap existing between earned retirement benefits and the long-term ability to pay those benefits. The benefits typically include monthly pension checks and sometimes medical benefits to either retirees, their surviving spouses or beneficiaries. The bulk of state employees are unable to amass significant savings for retirement during their careers. So any interruption or reduction of these payments in their golden years could be devastating.

Passing Amendment 3 allocates a minimum 25% of surplus money to fund the 4 major state retirement systems. This significantly reduces the unfunded liability gap of each system. Louisiana has 147,400 state retirees. Many spent 30 years of their lives serving the state. A yes vote means they become more financially secure in retirement. Even then, legislators would still be able to haggle over how to spend up to 50% of any annual surplus. If the measure fails,  legislators retain heavy discretion and authority over approximately 65% of surplus funds. They can direct this money to other projects that could be beneficial but only to their local constituencies.

HB 47, introduced by Representative Richard Nelson, passed unanimously in the House and passed 37-2 in the Senate.

AMENDMENT 4 (FOR)

With HB 46 voters will decide whether owners of exempt residential property determined to have “repeated public health or safety violations” should have their exempt status revoked, placing those properties on the taxable property roll. A 2023 report by the Orleans Parish Assessors Office tallies 11,227 exempt real estate properties. That is 6.8% of the total 164,524 real estate properties  .

Current state law allows real property owners to submit applications to their parish assessor to have their properties exempt from taxation.  A typical application for exemption requires responding to a myriad of questions. In New Orleans, exempt property counts are prominently displayed and easily identifiable. But the volume of statewide exempt real estate properties is not easily measurable. 

Bad landlords are common in Louisiana and the United States. The overwhelming majority of landlords’ properties are not exempt from paying property taxes. However, a particularly negligent landlord who owns several exempt properties has become the impetus to force change. Tenants of The Willows Apartments, a development with 260 exempt units located at 7001 Lawrence Road in New Orleans and owned by Global Ministries Foundation (GMF) of Tennessee, have filed suit over deplorable living conditions that allegedly have existed for long periods  

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Similar substandard conditions have been reported at two other GMF owned properties, Parc Fontaine Apartments in Algiers and The Bellemont Apartments in Metairie (Jefferson parish). Common tenant complaints include but are not limited to unrepaired leaks that foster mold, termite infestation, and lack of adequate security on premises. In 2019 a 3 year old child died in a Bellemont apartment determined to have no working smoke alarms. 

Proponents are counting on passage of this amendment to give landlords of exempt properties another strong incentive, besides code enforcement fines already levied, to repair and maintain their leased properties. The aggregate assessors’ appraised value of just these 3 GMF owned developments is over $ 48 million, which would yield over $ 688, 000 in property taxes annually if exempt status is revoked for non-compliance.

Some argue that revocation of exempt status does not ensure that landlords will remedy defects and conditions. HB 46, introduced by Representative Jason Hughes, passed with the required 2/3 vote in the House and unanimously in the Senate.