According to the City of New Orleans in a press release, it is “on track with its financial projections, despite increased expenses during this year, members of the Revenue Estimating Conference Committee will report today. 

The strong financial position is partly the result of record-breaking attendance for at least a half dozen festivals this year, including the French Quarter Festival, the Essence Music Festival, the New Orleans Jazz and Heritage Festival, and Vieux-to-Do: Creole Tomato, Seafood and Cajun Zydeco Festival, according to data from the New Orleans Tourism Marketing Corporation. Overall, the City revised its sales tax collections for 2008 upward to more than $150 million as a result of several factors, including the impact of the NBA All Star game, the BCS championship game and other one-time collections which have positively impacted general and hotel-motel taxes. 

"Visitor stays are longer and each visitor on average is spending more," said Janet Speyrer, Associate Dean for Research in the College of Business Administration at the University of New Orleans. "Therefore, total visitor spending has increased to levels nearly as high as those of 2004. Visitor spending totaled $4.8 billion for 2007."

The adjusted revenue collections will offset an increase of approximately $13.5 million in expenditures for police overtime, hospitalization and other costs.  

New Orleans hotel occupancy rates have been particularly high in the first half of 2008. While hotel inventory increased 4 percent over the same period of 2007, the number of occupied room nights is up by 16.4 percent from early 2007. The number of occupied room nights is 88.4 percent of occupied room nights in 2004. 

The growth in sales taxes is expected to be influenced by the negative impact on port activity and tourism caused by the recent oil spill on the Mississippi River. Future forecasts will include these adjustments.  

In addition, the 2008 Budget contains a structural deficit of approximately $12 million, resulting from the decision to use the City's fund balance to finance recurring expenditures. The deficit is projected to grow to $23.5 million in 2009, and will include $9 million to restore the Undesignated Fund balance to 10 percent of expenditures - which can be used in case of emergencies - and $2.5 million in various adjustments. The City Council unanimously adopted a resolution reflecting the body's intent to resolve the budgetary imbalance by raising revenues and/or reducing expenditures. The adjustment will provide fiscal stability by 2011, when federal and state loans are exhausted and the city is operating entirely on its revenue. 

"The City of New Orleans must practice expenditure discipline during this period of uncertainty, but we are optimistic regarding the city's continuing financial recovery," said Reginald Zeno, Director of Finance and a member of the committee. 

The Revenue Estimating Conference Committee meeting will be held at 2 p.m. today in City Council Chambers. Other committee members of Mayor C. Ray Nagin; Councilmember Cynthia Hedge Morrell, who is also chair of the City Council Budget Committee; Dr. Brenda Hatfield, Chief Administrative Officer; and Peter Ricchiuti, Director of Research at Tulane University.”