New Orleans Mayor Landrieu Eyes Major Budget Shortfalls
Written by  // Wednesday, 14 July 2010 09:41 //

tidmoreIn a State of the City Address entitled Eyes Wide Open, Mayor Mitch
Landrieu told a packed audience at Xavier University on Thursday, July
8, 2010, “During the transition, we were told that the city had a $35
million deficit. If that was not bad enough, when my team got into
City Hall, we opened the books and after a thorough audit found that
the budget deficit was $62 million."



"Since then," he continued, "we discovered that the city
failed to properly account for a $5.5 million deficit in 2005. So the
gap is now $67 million. With only six months left in the year, we face
a $67 million deficit. We are obligated by law to have a balanced
budget. The budget that we inherited and must live with was passed
last year, and during the first five months of 2010, it was mismanaged
from the top to bottom…We are living well beyond our means.”
The desperate reality of the fiscal situation led one
Councilman to confide confidentially to The Louisiana Weekly, "We
don't want to raise taxes, but we might have to...maybe even back
close to the milliage rate we once had."

The Councilman, speaking on terms of confidentiality to this
newspaper, referred to the fact that higher property assessment values
on homes and commercial real estate had allowed the City Government to
roll back milliages to 144 mills in the years after Hurricane Katrina,
from their height in the 180s as more taxable property entered spiked

This roll back allowed Orleans Parish to again become
competitive in property tax with the surrounding
parishes--particularly Jefferson with its 108 mills rate--without a
corresponding drop in total revenue.  Small businesses and industrial
concerns began to take a second look at the city as they saw that
their property tax rate would fall in the same range as other

The difference is this year, revenue has tanked, and some
people on the Council are beginning to wonder whether a tax increase
is coming.  In an exclusive, the Landrieu Administration tells this
newspaper that as its currently stands, tax increases are off the
table.  Right now, the plans is to balance the budget through cuts.
Ryan Berni, Press Secretary to the Mayor, tells the Weekly, "We
are looking at a number options to bring the 2010 budget in line. At
this time, a millage increase is not one of them."

The statement specifically does not rule out the idea of
milliage roll forwards, but it is firm enough to conclude that the
Administration deems them unlikely this year--especially since Mayor
Landrieu laid out approximately $30 million in budget savings in his
speech. Additional budget cutting solutions will be announced in the
coming weeks, according to Bermi.

As Landrieu himself explained, “And across all departments,
we’ve reduced overtime from as high as $3.5 million in February to
less than $1 million in May and June. And we expect it to drop even
further as all departments manage their overtime budgets effectively –
saving the city well over $10 million by the end of the year. I’ve
made it clear that we will not tolerate departments overspending their

"We are currently projecting departments are over budget by
$27.9 million. But I have ordered each department to develop a plan to
live within their 2010 budget. So in addition to cutting overtime,
they are also reducing hiring and travel in order to balance their
"We are also cutting and renegotiating contracts. For
example, we restructured the MWH recovery contract to save the tax
payers $1.1 million over the next three months. We are cancelling two
IT projects to save $1.3 million and reducing five IT contracts to
save an additional $800,000 this year. In fact, all contracts are
under review.”

The Mayor concluded his remarks by saying, “So, while it is true
that we have inherited a myriad of problems and City Hall is
dysfunctional, it is also true that we own it now. All of us,
together. And while it will take longer than 67 days to turn the tide
of dysfunction that has swept across this city for so long, it is our
duty, yours and mine, to fix it and get us to where we want to be.”

In his speech, Mayor Landrieu also addressed priorities on recreation and NORD, education, and the Oil Spill and Lake Ponchartrain.  

By Christopher Tidmore at This email address is being protected from spambots. You need JavaScript enabled to view it.

Christopher TIdmore is on the radio weekdays from 7-8 AM on 1560 AM
New Orleans and 1590 AM Baton Rouge, online at www.gtmorning.com

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