A 5 percent cost-of-living raise for about 3,200 Jefferson Parish government employees highlights the $607 million budget that Parish President John Young’s administration is proposing for 2016.
The Parish Council is expected to vote on the budget next month, which will be Young’s last as Jefferson’s president. He will be succeeded in January by Kenner Mayor Mike Yenni, who handily won the president’s job last month while Young fell short in his bid to make the Nov. 21 runoff for the lieutenant governor’s seat.
The budget Young has proposed is $27 million more than the one for this year, which itself was $25 million more than the 2014 spending plan. It includes $464 million for operations and $68 million for infrastructure improvements. Another $50.4 million will go to debt service and $24.6 million to grants.
Despite the increases, officials said they do not believe residents will see much of a change in the level of services provided by the parish because of restrictions on how the parish’s money can be spent, conservative fiscal projections and a commitment to stashing any money not immediately needed into reserve funds meant to preserve the parish’s solid, AA bond rating.
What most distinguishes the proposed 2016 budget is the raise for parish workers, which would cost about $6.7 million. The Young administration is funding the raises largely by leaving vacant positions unfilled, slightly increasing health insurance costs to workers and reducing employer contributions to the parish’s retirement system by 1.5 percent.
Another notable feature: $5.9 million of infrastructure improvements for the parish library system, some of which will be used to build a new branch in River Ridge.
Otherwise, the proposed budget contains few surprises.
By law, most of the money Jefferson Parish brings in must be used for specific purposes, such as streets or drainage work. Those specific purposes command about 78 percent of the operating revenue projected in the 2016 budget.
The Parish Council and administration can decide how the remaining money, the general fund, is spent, but even that cash has restrictions.
The parish projects it will spend about $98 million from the general fund in 2016, but by law, $42.3 million of that — or 43 percent — will go to other parish agencies such as the District Attorney’s Office and the courts.
About 85 percent of the money for infrastructure improvements will be spent on streets, drainage, sewers, water projects and environmental and landfill work.
The parish expects to generate about $588 million in total revenue, with $217 million coming from property taxes, $147 million from sales tax collections, $11 million from other taxes, $117 million from service charges, $37 million from federal and state grants and the rest from various other sources.
On the operating budget, spending is estimated at $464 million and revenue at $447 million, meaning the parish’s $185 million fund balance is forecast to drop by $17 million to $168 million — a figure that budget makers in financially challenged New Orleans can only eye with wide-eyed envy. Property taxes are predicted to bring in $189 million, service charges $117 million, sales taxes $82 million and other sources $59 million.
The sales tax figure is not forecast to change significantly from the prior year. In fact, the parish projected its sales tax revenue for 2016 by using actual collections from 2014. Young said his administration prefers to use actual collections from two years before the budget year for its sales tax estimates because the unpredictability of the economy makes it difficult to project future revenue from that source.
That fiscally conservative practice is part of the reason why the budget’s projected operational spending outpaces expected revenue, Finance Director Timothy Palmatier said.
But 12 percent reserve fund balances that were required of all parish departments both last year and this year will carry over into 2016, which should help cover the difference, Palmatier said.
The 2016 budget calls for all departments again to have a 12 percent fund balance, which is key to getting the high marks from bond rating agencies that Jefferson’s government needs if it wants to borrow money at low interest rates.
The budget does not include any of the money the parish received from its lawsuit settlement with BP over tax revenue lost after the 2010 oil spill; after paying attorneys’ fees and special districts dedicated to purposes such as sewage, lighting and fire protection, the parish got nearly $35 million.
And it does not include any of the money the parish is projected to make from the recently consummated deal to lease the publicly owned West Jefferson Medical Center to a private operator for a minimum of 45 years in return for at least $200 million in rental fees, $340 million in capital improvements and between $31 million and $51 million in other payments.
Although the proposed 2016 budget, like its predecessor, is a “standstill” budget, Palmatier said that is a sign of the parish’s fiscal health.
“It’s in very good shape,” he said of the parish. “We have a strong financial picture.”
Nonetheless, Young warned in a memo to the Parish Council that expected belt-tightening by the state could affect parish government’s operations.
“As the state continues its budget cuts, local governments are being called upon to shoulder the burden of expenses for those services previously provided by the state,” Young said. “If Jefferson Parish is to provide the same or better level of service currently provided ... the call to do more with less is even more compelling.”