Taxpayers and parish government officials should be vigilant to an issue under consideration by the state Supreme Court that would take away the ability of local governments to impose a penalty on delinquent property taxes. Such penalties have proven very useful to the City of New Orleans and other governmental bodies around the nation as a way to encourage prompt payment and meet their budgetary needs.
Wealthy trial lawyers in New Orleans, who themselves were delinquent on paying property taxes, have sued that city claiming that any penalties on past due property taxes are unfair and in violation of the state constitution. The Supreme Court heard their arguments on May 22nd and may be ruling on the case by the fall.
That ruling could have statewide ramifications.
If the plaintiffs succeed, the only recourse to encourage prompt payment will be costly and time-consuming tax sales, which have proven to be very ineffective.
While not everyone likes the idea of a penalty on late property taxes, imposition of penalties is no different than the approach used by state and local governments across the nation as well as the Louisiana Department of Revenue, the IRS, and utility and credit card companies, etc.
While the court ruling is specific to a New Orleans ordinance, that ruling will have a statewide impact and could hurt local governments at the expense of people who often have the means but not the desire to pay their fair share on time.
New Orleans, La.