Landrieu proposal to top $500 million
One thing is certain about the 2014 budget that New Orleans Mayor Mitch Landrieu will present to the City Council on Tuesday: The proposed general fund operating budget — what most people mean when they refer to the city budget — will total $504,348,535.
That is the figure the city’s Revenue Estimating Conference adopted Friday as the official revenue forecast for 2014.
It compares with the $491.4 million budget Landrieu proposed a year ago for 2013, a number that has since grown to just under $495 million.
So the city expects to have about $9.5 million more to spend in 2014 than in 2013, which sounds like good news. The problem is demands on the budget are growing even faster than revenue.
Among those demands: federal consent decrees mandating major changes to the Police Department and Orleans Parish Prison, and rising costs for basically unavoidable expenses such as pensions, health care and workers’ compensation.
Not to mention a Civil District Court judge’s ruling several months ago that the city must immediately pay $17.5 million to cover unmet 2012 obligations to the firefighters’ pension fund.
The city is appealing that ruling, and it seems unlikely Landrieu’s proposed budget will include money to pay the judgment.
Exactly how many millions of dollars Landrieu will include in the budget to implement the two consent decrees won’t be known until Tuesday, but he has said many times the city can’t afford to carry out both sets of mandates simultaneously without causing cutbacks elsewhere, such as widespread furloughs or layoffs.
His arguments have failed to persuade federal judges that the city should be relieved of any of the mandates the consent decrees impose.
The 2013 budget included cuts to many departments’ budgets of 8 percent to 10 percent of their 2012 spending levels. The Police Department budget was allowed to grow by almost $7 million this year, not counting another $7 million to begin implementing that consent decree.
It seems likely that further cuts are in store for many city programs in 2014.
On the positive side, city sales and property tax revenue is projected to grow by about 3 percent in 2014, with similar increases anticipated each year through at least 2018, in part because of the opening of major new stores and developments such as two Walmart stores, a Costco, the planned Magnolia Marketplace, the redeveloped Riverwalk mall and the South Market District.
Other revenue categories, such as licenses and permits, service charges and intergovernmental revenue, are expected to grow slowly or remain flat over the next few years, meaning overall revenue growth is forecast to be only about 2 percent a year.
The Revenue Estimating Conference was told the administration budget for 2014 will include an anticipated $1 million contribution to the general fund from the French Market Corp. and $1.275 million in extra revenue the city hopes to get from a new policy of cutting off water to Sewerage & Water Board customers who don’t pay the monthly sanitation service fee on their water bills.
At present, water can be cut off only to customers who don’t pay the water board’s own bill, not the city fee tacked onto it.
Landrieu made the same proposal a year ago, asking the City Council to change the law so water can be cut off to households that fail to pay the city fee that helps finance garbage collection.
The council never acted on the suggestion, but Chief Administrative Officer Andy Kopplin said he expects the change will be made this year.
Landrieu also proposed an even bigger revenue increase a year ago, asking the council to raise the franchise fee paid by Entergy — and ultimately by its customers — enough to produce another $10 million to $11 million in 2013.
He proposed dedicating that money to streetlight repairs. Even though malfunctioning streetlights have been a major complaint of council members ever since Hurricane Katrina, the council never acted on that proposal either, and Landrieu’s 2014 budget will not include any revenue from that source.
The City Council will begin hearings on Landrieu’s budget proposals next week, with individual department and agency heads scheduled to testify before the council in morning and afternoon (and sometimes all-day) sessions on Oct. 23, Oct. 25, Oct. 28 through Nov. 1, Nov. 4, Nov. 5, Nov. 6, Nov. 11 and Nov. 12.
The council then plans to adopt the budget, probably with only slight modifications from Landrieu’s proposals, at its regularly scheduled meeting Nov. 21.
Under the City Charter, the council has until Dec. 1 to pass a budget, and it usually waits until close to the last day, but it plans to get the probably painful task over early this year.
One reason is that Thanksgiving is late, on Nov. 28, and the council does not want to work that week. Another is that Dec. 1 itself falls on a Sunday.
So city departments will know a few days earlier than usual just how much money they can plan to spend in 2014. For many, the news is not likely to be very good.
The schedule for the council’s budget hearings can be found on the meetings calendar at www.nolacitycouncil.com.