Cantrell's proposed budget fix: Higher taxes, big cuts
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Mayor LaToya Cantrell on Wednesday proposed raising sales taxes, parking meter fees and sanitation fees to turn around the city's struggling financial situation.
Why it matters: New Orleans has an estimated $100 million deficit this year due to overtime costs and declining revenue, officials say.
The big picture: Cantrell and her top financial leaders painted a challenging financial situation Wednesday before the City Council, saying big events like Super Bowl LIX and Taylor Swift's concerts didn't generate as much money as expected.
- Revenue is expected to drop another $50.5 million next year, requiring cost-cutting to avoid furloughs and layoffs, said chief administrative officer Joe Threat, Cantrell's second-in-command.
- The administration is proposing a 30% cut to all agencies' operating budgets.
- They currently have hiring, spending and travel freezes in effect, Threat said, and those are likely to be extended past December.
Friction point: Cantrell and council members had several testy moments Wednesday as they pointed fingers about spending.
- They agree, though, that the bulk of the deficit — about $70 million of it — is from NOPD overtime related to the terrorist attack, the winter storm, Mardi Gras and the Super Bowl.
- At the council's request, the state legislative auditor began going through the city's financials Monday to get a more complete picture about the deficit.
Catch up quick: The first warning bell about financial trouble came in February, after Cantrell backed out of a settlement with the Orleans Parish School Board.
- Romy Samuel, the city's finance director, told the council that "financial instability is imminent" for the city in her February presentation if spending and revenue trends continued.
- Councilmembers at the time seemed skeptical, but City Council president JP Morrell pressed if austerity measures were needed.
- The council then passed a travel ban for all city employees, including Cantrell. A judge later put that on hold.
How it works: The council is responsible for passing the city's budget, which is expected in December.
- Budget chair Joe Giarrusso said the hearings will happen after the Oct. 11 primary to avoid any political conflicts.
- Councilmembers Helena Moreno and Oliver Thomas are both running for mayor, while Giarrusso and Cantrell leave office in January.
What's next: Each department will go before the City Council starting Oct. 14 to discuss its budget.
- The hearings are open to the public. See the schedule.
Go deeper: Cantrell administration's budget proposal