While the sources for most of the money in Mayor Mitch Landrieu’s proposed 2016 operating budget are set, raising the full $592.7 million it assumes the city will have available to spend next year will require the City Council to sign off on several revenue-raising proposals, involving millage rates, parking meter rates and the use of one-time money.
Revenue will be the first topic up for discussion Monday, when the council begins a marathon of meetings to hash out the details of the budget.
The meetings will be held in the City Council chamber almost every day for three weeks, starting at 10 a.m. each day. The council plans to vote on the budget Nov. 19.
One of the first questions facing the council will be whether to follow the administration’s recommendation and keep property taxes at their current rates.
That issue comes up because the city is in a reassessment year, when all properties are supposed to have been re-evaluated and new buildings added to the rolls, presumably resulting in higher total assessments. During a reassessment year, property taxes are automatically “rolled back” to rates that would keep city revenue at the level it was before the revaluation. If the council wants to keep the benefit of the higher assessments, it must then vote to “roll forward” the rates to their current level.
The difference between the two rates amounts to about $4.9 million, a little less than 1 percent of the city’s overall budget.
“The fact that more folks are moving to New Orleans and we’re gaining population means we have to provide more services,” Chief Administrative Officer Andy Kopplin said. “But it’s not increasing your property taxes or mine by adding Joe who just moved to town to the property tax rolls. A roll-forward allows the city to maintain existing tax rates exactly as they are while capturing that increased population growth.”
Potentially more controversial is a proposal to increase the rates at parking meters and extend their hours. Under the plan proposed by the administration, meter rates would go from $1.50 an hour to $3 an hour in the French Quarter and Central Business District, and to $2 an hour elsewhere in the city. Hours when meters are active also would be extended, with drivers expected to feed the meters until 10 p.m. instead of 6 p.m.
The plan is expected to generate about $2.35 million from the meters themselves and another $1.95 million from tickets for violators, while costing about $1 million extra for enforcement.
Both Kopplin and Councilwoman Stacy Head, who chairs the council’s Budget Committee, cast the increase as a way not just to bring in more revenue but also to make sure coveted spots close to shops and restaurants are available to customers by preventing people from monopolizing spots for many hours. Doing so would benefit those businesses and also reduce traffic by reducing the number of people driving around looking for a free space, Head said.
On Magazine Street, for example, later hours could mean that more workers will start parking on side streets where parking isn’t metered, she said. That would free up spots in front of the businesses for customers. Because those customers now park on the side streets, such a change would not result in a net increase in parking in residential blocks, she said.
“There are studies and proof that parking meters in fact improve the viability of urban shopping districts,” Head said, noting that preventing people from parking on the street for long periods of time means more spots for customers. On-street spaces in shopping areas, she said, are the most valuable and should not be taken up by employees.
Things could be a bit more complicated in the French Quarter and CBD, where free parking is in especially short supply. But, Head said, some of the responsibility for making sure workers have a place to park has to fall on the businesses themselves.
“The restaurants or hotels who hire them are going to have to figure that out as part of doing business,” she said.
While not part of its operating budget, the administration also is relying on voters approving a new bond issue in April to pay for about $50 million in street repairs in 2016. That issue will not require a tax increase.
In addition to those proposals, the council will have to sign off on various sources of one-time revenue.
The amount of money in the budget from one-time sources is higher than it has been in recent years, though less than was needed when Landrieu first took office in 2010 and declared the city’s finances to be in disastrous condition. Overall, at least $23.8 million in the proposed 2016 operating budget would come from sources that cannot be counted on in future years or else from the city’s reserves.
That’s about 4 percent of the spending contemplated in the plan, a slight tick up from the 3 percent this year and a larger share of the budget than in any year since 2010, when one-time sources accounted for about 7.5 percent of the city’s spending.
However, nearly half the money is slated to go toward a single, one-time payment needed as part of a deal to settle a decades-old, $75 million judgment against the city for its failure to give firefighters raises that were required under state law.
About $10 million will be taken from the city’s reserves to cover part of the $15 million up-front payment required by that deal, which Kopplin noted will go toward settling a significant liability on the city’s books that will not come again in future years.
He said the administration is still working with the council to find the other $5 million for that payment, a process that is expected to involve dipping further into the city’s reserves.
“We’re still very pleased to commend this budget as having a minimal amount of risk in it with regard to the one-time money,” Kopplin said.
“We take a very conservative approach to that, as most voters would want us to, so we don’t end up in the position the state is in,” he said, referring to constant battles in Baton Rouge over the use of one-time revenue as a significant portion of the state’s budget. Tapping those sources to fix budget holes in recent years has been blamed for some of the budget problems now facing the state.
Kopplin also argued that much of the money lumped into that category is not truly one-time windfalls.
The largest of those items is Medicaid payments for an ambulance service the city provides, expected to total about $3.6 million in 2016. Those payments have been coming in steadily for five years, though they technically are still considered one-time revenue, Kopplin said.
Anther $2.65 million is coming from the French Market Corp., $250,000 of which will go to pay for inspections and enforcement of the city’s noise ordinance, a process that began last month with an educational initiative from the Health Department known as “Sound Check.”
The rest of the one-time money comes from the expected sale of tax-delinquent properties and a final payment from the Morial Convention Center as part of a deal for services during the Super Bowl.
Another potential issue in the budget was avoided Saturday, when 78 percent of voters in the French Quarter approved a quarter-cent increase in the sales tax in that district to provide about $2 million a year to help pay for an ongoing State Police presence in the Quarter. No alternative funding source for that presence had been identified, so had the sales tax failed, the city would have faced a last-minute scramble to come up with that money.
That leaves one major source of money that is not, currently, in the budget itself: the city’s $36 million share of the settlement with BP for the economic impact of the Deepwater Horizon oil spill. The City Council is expected to weigh in on how that money should be spent.
Editor’s note: This story was altered on Oct. 26, 2015, to reflect that not all of the French Market Corp.’s contribution to next year’s city budget will be spent on noise enforcement.
Follow Jeff Adelson on Twitter, @jadelson.