New Orleans will largely be carrying over its existing budget into 2018, Mayor Mitch Landrieu announced as he unveiled a $647 million spending plan on Monday.
The budget, however, includes money for hiring 150 more police officers and giving all officers a raise, more Emergency Medical Services workers and additional security at public buildings.
In announcing the plan, Landrieu also called for the city to set up a "rainy day fund" that would be accessible only in cases of emergency, though the details of that plan are still being worked out.
“In this, our final year in office and in our final budget, we will cement the strong foundation we have built for the future, while also staying focused on the challenges that continue to hold us back,” Landrieu said. “That’s why for the 2018 budget we are staying the course, largely maintaining priorities from 2017.”
Landrieu's second and final four-year term will end in May.
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The budget is about $33 million higher than the one approved by the City Council last year and $25 million higher than the city is likely to end up spending in 2017.
Much of the extra spending goes to a few big-ticket items, including $5 million to the Fire Department’s budget to account for a tax voters approved last year to help pay a settlement with firefighters over back pay and to shore up their pension system.
Other new or increased items in the budget include about $2 million to operate a "low-barrier" homeless shelter and maintain the former Veterans Affairs building that will house it, $1.8 million for the Youth Study Center, $1.7 million to add more security at government buildings and operate a new Police Department command center, $1.5 million to improve maintenance on city vehicles, $1.4 million to improve information technology systems and $1.2 million to hire 17 more EMS employees.
Landrieu has typically unveiled his budget in October, followed by lengthy hearings as the City Council picks through the spending plan for each department before adopting a budget, usually slightly revised, in November.
The process was moved up this year to avoid conflicts with the October elections. In doing so, the administration likely has given itself a firmer hand in the budget-making process than it would have had in the fall, with attention focused on the candidates vying to replace Landrieu. It also has given itself a document it can use to respond to criticisms and proposals that come up in the campaign.
Officials are still discussing exactly how the rest of the budget process will play out and when a final vote will be taken.
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The administration also unveiled a $691.4 million 2018 capital budget that includes $421 million for public works, most of which will go toward street repairs and rebuilding.
The budget comes with a positive outlook for next year’s revenues, though the forecast is for less growth than in 2017. City economist Deborah Vivian said that is in part because many new sources of money — including legalized short-term rentals, ride-hailing services and additional money the city is bringing in from federal healthcare payments and the firefighter tax — already have boosted the budget.
The city expects to bring in an additional $2 million in sales taxes on short-term rentals next year and to make about $5 million from another round of sales of tax-adjudicated properties. Sales taxes overall are expected to increase by $4.7 million, in part because of more short-term rentals and higher tax collections on internet sales.
However, the city will be getting only half of the $3.6 million it can normally expect from the state under the agreement that allows Harrah’s Casino to operate in the city. That’s because the casino didn’t bring in as much money as it typically does.
Landrieu said he will ask voters to amend the City Charter to create a "rainy day fund" for use only during emergencies. He said an amendment dealing with the fund would be on the November ballot.
The fund would be equal to about 5 percent of the city’s budget. The money would be kept in reserve except in cases where the City Council declares an emergency situation, Chief Administrative Officer Jeff Hebert said.
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The city now has a reserve fund of a bit more than 10 percent of the budget, an amount high enough to yield positive reviews from the bond rating agencies whose judgments determine the rates at which the city can borrow money.
However, the city regularly dips into that pot — $6.7 million in the current budget comes from reserves — and the "rainy day fund" would ensure that money would be on hand for major disasters or economic downturns.
The exact circumstances under which the fund could be tapped are yet to be determined, as are other issues such as how quickly the city would have to replenish it.
Landrieu closed his budget address to the council with another call to whoever is elected to succeed him in the fall elections to continue to stay the course.
“We need this leadership to ensure public confidence in the stewardship of taxpayer dollars,” he said, “to ensure that the public trusts government to do what is right and increase investments from businesses. There must be fiscal responsibility, predictability and absolutely no corruption. We cannot return to the days where businesses feel they need to pay to play. We need to continue efforts to increase business attraction, to grow our economy and create jobs.”