February 22, 2019 Pro Bono Matters

Pro Bono Matters at the Section’s January 2019 Meeting in New Orleans: Because Living’s Not Easy in the Big Easy

By Francine J. Lipman, William S. Boyd Professor of Law, William S. Boyd School of Law, University of Nevada, Las Vegas
“People don’t live in New Orleans because it is easy. They live here because they are incapable of living anywhere else in just the same way.”
Ian McNulty

La Nouvelle-Orléans was named just over three hundred years ago by the Kingdom of France after its Duke, who himself was named after the French city, Orléans. France ceded its Mississippi River port to Spain in resolution of the war with Britain in 1763. Nueva Orleans reverted back to France for roughly one year until Napoleon sold Louisiana to the United States for 3 cents per acre or $15 million in 1803.

“New Orleans makes it possible to visit Europe without leaving the United States.”
Franklin Delano Roosevelt (1882–1945)

New Orleans became a major trading port on the mighty Mississippi and a thriving, southern, immigrant-rich city. When railways and highways opened up the west, economic dependence on waterways and port cities diminished. Nevertheless, NOLA, a sea level city, is delineated by and too often inundated with excessive amounts of water. It rains incessantly, one out of every three days, making the Crescent City among the wettest in the United States. It receives more than five feet of rain annually.

“How often have I lain beneath rain on a strange roof, thinking of home.”
William Faulkner (1897–1962), As I Lay Dying
“Don’t you just love those long rainy afternoons in New Orleans when an hour isn’t just an hour - but a little piece of eternity dropped into your hands - and who knows what to do with it?”
Tennessee Williams (1911–1983), A Streetcar Named Desire

The United States’ transition from an industrial, manual labor-based economy to knowledge-driven and education-based commerce has not gone smoothly in Lousiana. In the 1970s, NOLA’s population decline and economic slide began. Despite a persistently challenged economy, nothing devastated the City of New Orleans more than Hurricane Katrina. Katrina was a catastrophic living nightmare. She caused so many levees to fail that eighty percent of NOLA flooded with some parts of the city under fifteen feet of water. More than 1,500 people died and almost 1,000,000 were evacuated.  The Big Easy has never quite been the same since Katrina slammed into town in 2005.

Music in New Orleans has always been the heartbeat that drives the city. It was that even before Katrina, and that’s what we had to rely on after the storm.”
Trombone Shorty

NOLA is the birthplace of “jazz” and “Dixieland” music, Louie Armstrong, Jelly Roll Morton, and Fats Domino. With a myriad of French, Spanish and immigrant influences, music and food are the gifts that keep on giving to this lazy winding river city. The convergence of phenomenal music and exceptional food has given rise to robust tourism, an industry the city increasingly relies on for jobs, tax revenues, and economic growth.

“New Orleans is unlike any city in America. Its cultural diversity is woven into the food, the music, the architecture—even the local superstitions. It’s a sensory experience on all levels and there’s a story lurking around every corner.”
Ruta Sepetys

The City of New Orleans is a seductress consistently ranking among the highest of all U.S. cities in the percentage of residents who are home grown. But smooth jazz, bayou blues, and creole cuisine alone cannot soothe the savage beast of poverty. Residents in NOLA and Louisiana have struggled with low rates of high school graduation and higher education attainment and the highest rates of poverty, housing and food security in America. About 900,000 of LA’s 4.6 million residents experienced poverty in 2017.

“I was a very poor young black boy in New Orleans, just a face without a name, swimming in a sea of poverty trying to survive.”
Tyler Perry

Louisiana ranked 50th among all states and D.C. with an overall poverty rate of 20% and suffered the highest U.S. childhood poverty rate of 28%. The poverty rates are even higher for communities of color: more than one-third of African Americans and one-quarter of Latinxs in Louisiana endure the plague of poverty. Similarly, Louisiana ranks 49th for food insecurity with more than 17% of its population braving hunger at some time during the year. Despite almost thirty four-year universities and more than 200,000 college students, Louisiana has a “brain drain” problem and ranks 51st for the percentage (only 33%) of its permanent residents who hold associate degrees or higher. Although more women than men are enrolled in state colleges, LA has the highest gender wage gap of any state and D.C., with women earning only 68.8 cents for every dollar men earn. Women also suffer higher rates of poverty than men, 21% as compared to 15%. Louisiana has a notably regressive tax structure that contributes to its 49th ranking in income inequality.

“New Orleans listens eagerly to the seductive promises of the future but keeps at least one foot firmly planted in its history.”
Tom Robbins

Louisiana ranks among the top fifteen states for most regressive tax system in 2018. The lowest quartile of LA residents with just over $17,000 in family income had an effective state tax rate of 11.9% and the highest 1% of households with family incomes of over $470,000 had an effective state tax rate of only 6.2%. Notably the top 1% of households had an effective sales tax rate of only 1.2% while the lowest income quartile braved a 9.2% effective sales tax rate.

“Times are not good here. The city is crumbling into ashes. It has been buried under taxes and frauds and maladministrations so that it has become a study for archaeologists...but it is better to live here in sackcloth and ashes than to own the whole state of Ohio.”
Lafcadeo Hearn (1850 – 1904), Inventing New Orleans

Factors that mitigate the regressive nature of Louisiana’s state tax system are its progressive income tax rates, refundable state Earned Income Tax and child care credits, and the exclusion of groceries from state sales taxes. Factors that contribute to and exacerbate the tax system’s regressivity are a heavy reliance on sales and excise taxes including taxing groceries at the local sales tax level and income tax deductions for federal and state taxes.

“You can live in any city in America, but New Orleans is the only city that lives in you.”
Chris Rose

Given the high rates of poverty and the regressive nature of the state tax system, it is essential that Louisiana has a low-income taxpayer clinic that protects taxpayers’ rights statewide. Southeast Louisiana Legal Services (SLLS) has been fighting for fairness for fifty years by providing free, civil legal aid to low-income people. SLLS has six offices located in Baton Rouge, Covington, Hammond, Harvey, Houma, and New Orleans. For every dollar spent on civil legal aid in the state of Louisiana, the return is $8.73 to the community. The community’s investment in SLLS has provided an economic value of more than $23 million in 2017 by preserving housing, connecting residents to disaster relief, securing child support, tax refunds and much more for almost 28,000 individuals. The long-term economic impact of this investment in access to justice in Louisiana is over $69 billion. Simply put, the investment return to communities for dollars spent providing access to legal services, including tax matters, is extraordinary. But the personal reward to the specific community members and the sense of purpose for the lawyers involved can be priceless.

“We educated, privileged lawyers have a professional and moral duty to represent the underrepresented in our society, to ensure that justice exists for all, both legal and economic justice.”
—U.S. Supreme Court Justice Sonia Sotomayor

So, the next time you visit New Orleans, whether with or without the Section, you now understand the richness and poorness of this unparalleled American treasure. Think about donating your time or money to SLLS, listening to sweet, soulful jazz, eating beignets and drinking café au lait, dancing with a second line brass band, taking a Writer’s Block tour to see the quarters of Tennessee Williams and William Faulkner, among others, but no matter what you choose to do (or not do) laissez les bons temps rouler.


Section of Taxation members can discuss this article in the ABA Tax Times Community. ➔