Supreme Court ruling second for parish in less than six months

A second ruling this year by the Louisiana Supreme Court in favor of the assessment process employed by Washington Parish is good news for the parish.

Randy Seal

In February, the high court denied an appeal of a ruling by Florida Gas Transmission that would have resulted in the parish having to refund $971,308.42.

Now, the court has dismissed an appeal filed by Southern Natural Gas Pipeline that would have resulted in more than $800,000 having to be refunded.

The ruling means the contested money may now be released from escrow and used to help fund the day-to-day operations of the parish.

The court fight is one that began more than a decade ago, when a group of oil-related businesses, including Southern Natural Gas Pipeline and Florida Gas Transmission, challenged the way the State of Louisiana assessed the value of its property.

What was happening, explained Washington Parish Tax Assessor Randy Seals, is that the state tax commission set the taxable value at 25 percent and the companies didn't think that was fair.

"They told the court that rather than 25 percent of the value placed on their business, they thought they should pay 15 percent of fair market value, like all other businesses. The court agreed, but said local assessors should do a formal assessment of the properties involved and go from there."

Seal said, in short, the companies didn't like the way the tax was configured to begin with — and didn’t like the new rule that was established.

"They discovered that 15 percent of fair market value might be higher than the taxes they were paying under the old rules," he said.

So, back in December 2006, Seal started asking the taxing entities in Washington Parish to authorize a resolution allowing him to hire an attorney to sue Southern Natural Gas, with the attorney working on a contingency.

Seal said the oil-related businesses had an advantage over the affected taxing entities because of the cost of a court fight. At the time, the attorney general ruled the tax money in question would be held in escrow and that local courts would have jurisdiction.

Seal said there was no appreciable difference in the amounts collected under the old and new methods, despite the difference in percentages.

"They (Southern Natural Gas) wanted to tell us what their values are," Seal said. "It would be just like any business operator in the parish saying they didn't want to pay any taxes this year and us not being able to do anything about it. They didn't like it the first way ... now, they don't like the way their suit turned out ... they can't have it all ways.”

In May 2007, Florida Gas Transmission, by this time known as El Paso Natural Gas, notified council members they wanted to appeal their assessment, which was upheld by the council.

Then, in September 2008, the Louisiana Tax Commission ruled that Washington Parish would have to return $1.5 million in taxes paid under protest. That ruling was overturned by Judge Peter Garcia in 22^nd District Judicial Court in February 2009, which led to the appeal to the state supreme court.

Affected entities included Washington Parish, Washington Parish Schools, Washington Parish Hospital Service District 1 (Riverside Medical Center), Washington Parish Sheriff, Florida Parishes Juvenile Center and three fire districts.