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Friday, 27 June 2014 14:23

Mayor Landrieu's Complaint on NOLA Being Shortchanged Is Bogus

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landrieu-allianceChalk it up either to embarking on an impending campaign for state office or to set the stage to squeeze more money out of taxpayers, or both, but New Orleans Mayor Mitch Landrieu’s assertion that Louisiana somehow shortchanges the city he runs is nothing short of ludicrous.


Landrieu made these remarks at a Bureau of Governmental Research supporters’ meeting, a group often critical of the spending choices and priorities of the city and the local governments associated with it. He spun a story of constituents querying him about why basic needs get delayed if any attention at all if the city makes so much money off numerous high-profile special events, with his answer being that it’s all a mirage. Using the 2013 Super Bowl as an example, he argued, “Even though the Super Bowl is a multimillion-dollar event, this city's general fund, your bank account, only netted $500,000, barely breaking even for the army of police, fire, EMS, sanitation, public works, permitting and other city employees who work day in and day out to make sure everything went off without a hitch.” He then funneled the topic to all of his glorious achievements even if the city doesn’t make much, and concluded with a diagnosis that the state holds the city back, opining that “Something needs to change. We need to cut loose. We need to get the state out of the way, realign powers so New Orleans has the resources that we need to stand on our own two feet.”

Which is an absurd comment, for no large city in Louisiana sucks at the teat of the state taxpayer as does New Orleans. Given the data available, it’s difficult to make a comprehensive comparison, but in taking the largest area of state expenditure, health care, Orleans Parish in Medicaid spending had the most (using the latest available fiscal year 2013 data) dollars showered upon it – almost a half-billion – of any parish and the most people in the program, even though its population was smaller than both Jefferson’s and East Baton Rouge’s. Further, it ranked tenth highest in the percentage of population receiving Medicaid, with only substantially smaller jurisdictions having higher proportions. And if you want to throw in the second-largest state expense, elementary and secondary education, keep in mind that the vast bulk of spending in New Orleans on this comes directly from the state, because most schools are in it are in the Recovery School District and all of those in that will be charter schools for the foreseeable future -- with a large portion of it accruing to the New Orleans economy, and the resulting conversion into city tax revenues.

While undoubtedly New Orleans also produces an outsized chunk of state tax revenues through its economic activities, it’s comical to suggest that this significantly outstrips the largesse the state shovels back to it – spending which finds its way into city coffers. And it’s equally laughable to assert that the city gets shortchanged in reference to the special events it hosts, which, if nothing else, shows Landrieu has either or both a short memory or a penchant to engage in selective use of facts.

He may rail about how little he figures the city may take from the Super Bowl, even as there would be no Super Bowl without a Superdome built and renovated at state expense to keep the New Orleans Saints in the smaller market, and with the team racking up state taxpayer subsidies for over a decade now and from last year to 2025 estimated to reach $400 million. Or how about a similar deal with the New Orleans Pelicans that became a swap of subsidies with tax credits that could have put state taxpayers on the hook for approaching $200 million over its lifetime that paved the way to keep the team in the city and paved the way for the National Basketball Association All-Star Game this past year to be played at the New Orleans Arena. So Landrieu seriously thinks this is too little to work its way into city tax coffers compared to what he thinks the city deserves?

And Landrieu, a former lieutenant governor, seemed entirely tone deaf to the complaints of his successor and likely gubernatorial candidate Lt. Gov. Jay Dardenne, who has objected to dollars for statewide tourism promotion to be shunted to New Orleans to subsidize these and other special events. Louisiana taxpayers have done more than their fair share to allow New Orleans the chance to suck in tourism revenues that accrue to local businesses and individuals that boost the city’s bottom line, regardless of the number of hours of overtime and extra hiring the city might have expended on these events.

There are still other kinds of gifts the state gives the city. For example, it subsidizes and allows the city to collect revenues as a consequence of the operation of the Ernest N. Morial Exhibition Hall Authority, which as a result has built up fat reserves the spending of which also pumps money into the New Orleans economy and thus to the city.

Of course, Landrieu has every incentive to try to paint a portrait of dark forces preventing him from running the city better, not just as a means to deflects complaints he claimed he had heard, but also to goad state and local voters and the newly-elected City Council to agree to allow for severe property tax increases over the next year, to make up for bad spending choices where his role in their metastasizing has paled in comparison to his predecessors, but who has suggested little more than higher taxes in response – despite the fact that Orleans has the fourth-highest rate in the state already, behind three much smaller parishes, and in a corporate tax environment so competitive that it ranks second best in the country for cities its size, right behind Baton Rouge and just ahead of Shreveport. And that the per capita expenses (excluding enterprises such as water and sewerage) of the state’s three major cities whose metropolitan areas were ranked in that survey are Shreveport (with its share of Caddo Parish) at $1,816, East Baton Rouge (including Baker, Central, and Zachary) at $1,216, and New Orleans at $2,004, indicate by comparison that Landrieu doesn’t exactly run the city economically in the first place. If anything, Orleanians need tax relief (just as Vanderbilt University fans were relieved finally to see the Commodores earn their status as the best college baseball team in America.)

Perhaps in more than one way New Orleans therefore is a junkie to the state and Landrieu wants its taxpayers to deal it more dope than ever, so he at least ought to show the courtesy of saying nothing about being beggared, if not actually acting grateful. Instead, he engages in this political strategy to push ever bigger government by trying to create this narrative that New Orleans unfairly is put upon. Nothing is further from the truth, and both state and local publics need to remember that.

Jeffrey Sadow

Jeffrey Sadow is an associate professor of political science at Louisiana State University in Shreveport.   He writes a daily conservative blog called Between The Lines | This email address is being protected from spambots. You need JavaScript enabled to view it.