BATON ROUGE — An amendment that would allow parishes to increase the homestead exemption failed 9-5 in a House committee Tuesday while a Senate committee heard but deferred two similar proposals.
The House Ways and Means Committee did not advance House Bill 440, which would have allowed parishes to increase the exemption by up to $5,000 in assessed value, or by a maximum of $125,000 off market value.
"At a time when we have rising insurance premiums and a rising cost of living, this provides immediate, tangible financial relief to Louisiana families," said Rep. Candace Newell, D-New Orleans, who authored the bill.
The current exemption is $7,500, unchanged since 1980.
Rep. Beth Billings, R-Destrehan, and Rep. Roger Wilder, R-Denham Springs, expressed concern that parishes would increase property taxes on business owners and higher-value properties to offset lost revenue.
"The money that we bring in is going to be pushed onto the businesses because that money still has to come from somewhere," Billings said. "And we're going to see a patchwork of 64 different parishes and create a nightmare for the tax commission that has to coordinate all of that."
Jim Patterson, senior vice president of government relations for the Louisiana Association of Business and Industry, opposed the bill over its potential impact on businesses, saying it could drive them out of the state.
Newell countered that businesses have already started leaving Louisiana, and "we ain't doing nothing to keep them here."
The vote split along party lines, with Rep. Les Farnum, R-Sulphur, the only Republican to vote in favor. Newell's bill would have required approval from the parish government and a parish-wide election before any exemption increase could take effect.
Rep. Marcus Bryant, D-New Iberia, who supported the bill, said the measure simply gave local governments the power to decide for themselves.
"I think it's a great idea because the locals have the power to decide or not decide, and we just give them that right," Bryant said.
In a Senate Revenue and Fiscal Affairs Committee meeting held at the same time, Sen. Caleb Kleinpeter, R-Port Allen, and Sen. Gregory Miller, R-Norco, voluntarily deferred their bills after hearing concerns that increasing the homestead exemption could harm middle-class residents and small businesses.
Kleinpeter's Senate Bill 7 would have amended the state constitution to allow parishes to increase the exemption by $5,000, raising it to as much as $12,500 of assessed value, or a maximum of $125,000 off market value. Miller's Senate Bill 88 would have allowed a statewide amendment permitting increases of up to $30,000 of assessed value.
Kleinpeter said his bill was designed to allow financially stable parishes to provide homeowners with a tax break. As a former West Baton Rouge Parish Council member, he said he had voted to reduce property tax rates when the parish had sufficient revenue to cover its budget, including education expenses.
Todd Dugas, the tax assessor of St. Martin Parish, said reducing unnecessary expenses could free up room to give residents a tax break.
"The more money I give my wife, the more money she spends," Dugas said. "And I think that is the same with parish government."
Sen. Eddie Lambert, R-Gonzales, acknowledged that a higher exemption could help older residents whose property values have increased over decades, leaving them struggling to afford the tax, but expressed concern about how parishes would replace lost revenue without raising tax rates.
"Somebody has to pay more," Lambert said. "I think that's what eventually is going to happen."
Sen. Jay Luneau, D-Alexandria, said he favored the potential relief for low-income homeowners but shared Lambert's financial concerns.
"The fact of the matter is, if we're going to cut this, we're either going to cut services, or we're going to increase somebody else's taxes," Luneau said.
Dugas told the committee that an increase in the property tax rate would be spread across all properties, including commercial buildings, and insisted the change would not necessarily mean higher taxes for homeowners.
Lambert noted that because commercial properties do not qualify for a homestead exemption and are taxed at a higher rate, parishes that raise the exemption could end up imposing a heavier burden on small business owners. He later floated an alternative approach: eliminating the homestead exemption entirely and lowering the overall property tax rate to bring more taxpayers into the system.
Kleinpeter clarified that SB 7 was intended only for parishes that could afford a reduction in revenue, meaning those parishes would not need to raise tax rates to compensate.
Luneau warned that political pressure from residents could push parishes that cannot afford the change to adopt it anyway, saying the resulting tax shift would "hit the middle class hard and it's going to hit industry."
Miller's amendment, which would have allowed exemption increases of up to $300,000 of market value, would have required parishes to absorb the revenue loss. After hearing the debate on Kleinpeter's bill, Miller postponed his vote to a later meeting.
Guy Cormier, director of the Police Jury Association of Louisiana, suggested that any such amendment include approval from the sheriff, school board, parish government, and a parish-wide vote before taking effect.
For any of these proposals to become law, they would need to pass both the House and Senate with a two-thirds majority, then win approval from a majority of Louisiana voters in the November election.
