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WDSU Investigates: Hundreds of dead people receiving property tax breaks in New Orleans

By Travers Mackel

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    NEW ORLEANS (WDSU) — In New Orleans, we bury the dead above ground.

Many times though, their spirit survives in the hearts and minds of the loved ones in their lives.

But in some cases, the deceased actually do live on – in property tax rolls in New Orleans.

“This is a crime punishable by at least six months in jail and a $500 fine,” New Orleans Inspector General Ed Michel said.

It’s called Homestead Exemption fraud, and it’s the subject of a law signed by Gov. John Bel Edwards that went into effect in 2016.

A crime is committed when people are knowingly living in a home with a homestead exemption or age freeze for an older citizen and getting a property tax break, that isn’t theirs – and they know it.

It typically happens when a person dies and a relative or loved one continues to stay in the home, without properly changing the title to avoid paying higher taxes.

The city’s Inspector General has taken notice of cases where people he claims are dead are still receiving a tax break in New Orleans.

Michel did a report on this in 2021, citing “18 residential properties which continued to receive a homestead exemption and senior freeze reduction despite the listed homeowner reportedly being deceased.”

But since then, “We got one complaint, and another, and the complaints just started coming through,” Michel said.

Now, two years later, Michel says that number has grown – a lot.

He says more than 300 dead people are receiving property tax breaks in New Orleans.

“If individuals do inherit a house from a relative after they are dead, they need to immediately contact the assessor’s office. It is their obligation to contact the assessor’s office and let them know the person who has the tax freeze or property tax exemption is dead and the property has to be reassessed,” Michel said.

Because leaving deceased people on the tax rolls is costing the city big bucks.

“It could be anywhere from $900,000 to several million,” Michel said.

Michel says he has forwarded more than two dozen examples to Orleans Parish Assessor Errol Williams so far in 2023.

WDSU Investigates also went to almost 20 other homes in question by the city. In some cases, people told us the listed property owner getting the tax break was in fact dead, but they were either unaware or unwilling to notify the city and start paying full taxes.

“Some of the people we talked with said, ‘Oh, I’m waiting for the assessor to come out here, but after 5-10 years – does that hold water?” Asked WDSU’s Travers Mackel.

Michel said he doesn’t think so.

“Do you think homeowners know they’re getting a tax break and just aren’t coming and reporting this?” Mackel asked.

“No, I think some of it is not being aware of what the law requires,” Errol Williams, the Orleans Parish Assessor, said.

WDSU Investigates asked Williams how and why people fall through the cracks.

“It has been a problem for assessors statewide,” Williams said.

Williams questions the numbers in the inspector general’s report.

The Democrat, who’s been in office since 1985, says he’s only received more than 100 valid claims from Michel’s office.

If he’s got 300, give it to me, and Errol Williams will go in and investigate them so I can get that workload off my plate,” Williams said.

Williams said his office works with the Louisiana Department of Vital Records to try to remove dead people from property tax rolls.

In recent years, he claims his office has tracked down more than 300, but he admits his process to find those ripping off the system isn’t perfect.

“Do you need a bigger staff, is your staff adequate, what’s the magic wand?” Mackel asked.

“There’s no magic wand, and to be honest, I have the resources to expand the staff to whatever size necessary to police this problem,” Williams said.

But some council members are questioning that.

“Remember, we tried to hire an outside contractor to help the assessor. The city didn’t want to do that, so now we’re stuck in neutral,” Councilman Joe Giarrusso said.

Giarrusso says any number of people getting fraudulent tax breaks is too high.

“Every nickel matters because all of these things pay for sewer, water, fire, police,” Giarrusso said.

The inspector general wants to make sure the faithfully departed are not haunted by a city not keeping track of the dead.

Just hours before WDSU Investigates was set to air this report, the Orleans Parish Assessor released a lengthy statement to all media based on WDSU’s findings and inquiry into this matter.

The Orleans Parish Assessor’s Office has canceled 4,393 Homestead Exemptions since the beginning of last year, Orleans Parish Assessor Erroll Williams said.

Identifying and addressing cases of Homestead Exemption fraud has been an ongoing issue in Orleans Parish since the tax benefit was made permanent in 2013. While the majority of properties that had Homestead Exemptions removed were a result of changes in ownership, a significant number are a result of investigations by Assessor’s Office staff and leads from the Clerk of Court, city of New Orleans Department of Safety and Permits Short-Term Rental Administration, Vital Records, the Legislative Auditor, the Office of the Inspector General, and citizen reports.

“Developing good communication and partnerships with engaged governmental agencies has really helped us in our fight against Homestead Exemption fraud,” Williams said. “People forget that a Homestead Exemption is a constitutional entitlement, so we have to be very careful and fully research each case of reported fraud. You can’t strip someone of a constitutional entitlement on a hunch.”

The total tally of exemptions canceled includes:

• 428 instances where the property owner was found to be deceased

• 165 cases of fraud related to a short-term rental license

• 54 counts where the property owner claimed a homestead exemption in another state

“We’re especially proud of the work we’ve done cracking down on cases of Homestead Exemption fraud related to an individual’s short-term rental license,” Williams said. “Our own anonymous tip line, in concert with the leads we receive regularly from Safety and Permits, has allowed us to keep a very watchful eye on these properties and move swiftly in instances of suspected fraud.”

Article 7 Section 20 of the Louisiana Constitution provides for the Homestead Exemption, which is available to every person who owns and occupies a home in Orleans Parish as their primary residence (domicile). This exempts the first $75,000 of the home’s market value ($7,500 of assessed value) from taxation.

But when a property owner receives a Homestead Exemption for which they are not entitled, it is deemed to be non-compliant and an abuse of the law.

If you know of a property in Orleans Parish currently receiving a tax reduction from an exemption that you believe it should not be receiving, we urge you to report the abuse by calling our Exemption Fraud Hotline at 504-754-8929.

When you call, please leave us a message with the following information, if known:

•The address of the property in question.

•Whether the property is occupied or vacant.

•Whether the property is a short-term rental.

•Name of person(s) occupying the property.

•The length of time since the owner has lived at the property.

•The address where you believe the owner may now be living.

For more information, visit nolaassessor.com/fraud-abuse.

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