The New Orleans Public Library system is quickly running out of money, and it could be forced to close branches by 2016, Executive Director Charles Brown told the New Orleans City Council during the library’s Monday budget hearing. Council members said they would support a proposal to raise property taxes for the library.
The library’s primary source of revenue is a dedicated, 3.14 mill property tax, but that doesn’t cover current operations. For several years, it has been supplementing that by spending down its reserve fund.
The system has budgeted about $3 million annually in reserve money in 2014 and 2015, or about one quarter of the library’s $12-million-plus annual budget. Mayor Mitch Landrieu’s 2015 budget proposal does not include an allocation from the city’s general fund, and the city has not allocated significant funding to the library system since 2009. Library officials have warned the city for years that its reserves are running out. By mid-2016, that money will be gone, Brown estimated.
“We’re at the most serious point in the library’s history since the mid-1980’s when branch libraries were facing closure,” Brown said. “Once again we’re looking at branch library closures.”
Brown said the New Orleans Public Library gets about $23.70 in funding per capita, the lowest per-resident rate among parishes in the metropolitan area, as well as among other high population Louisiana parishes and major Southern cities. Among a group of cities with high poverty rates — New Orleans’ poverty rate approaches 30 percent — only the system in Gary, Ind., had lower per capita funding.
The library is budgeted for 175 full-time positions in 2015. Nearly all of the millage, which is expected to generate $9.5 million next year, goes to personnel costs, Brown said. Without a new source of money, the system would face drastic staff cuts and service cuts, possibly including closing some of its 14 locations.
Councilwoman LaToya Cantrell asked Brown how much a $1 million allocation from the city would help. Brown said that it would allow the library to hire some part-time, temporary employees, but he would not use one-time money on recurring, permanent jobs.
At 3.14 mills, the library’s millage is slightly less than the 3.31 mills that the Audubon Nature Institute receives for its aquarium and zoo, which receive revenue from admissions. A ballot proposal to increase Audubon’s millage failed this year.
A single mill generates between $2.8 and $3.1 million, depending on the city’s rate of collection. So the rate would have to increase by at least one mill just to get to the library’s current $12.5 million annual budget. That translates to about $20 per year in taxes on a $200,000 home. The library system would likely want more to cover staff increases for the planned reopening of the Nora Navra branch.
The City Council would have to call for a vote and it would need to pass at the polls. Earlier this year, WWL-TV reported that the city and the library were in talks to get an increase on the ballot for Dec. 6, but that did not materialize. Council members on Monday signaled support for a ballot proposal in a later election.
“I stand with you. I will fight for this millage for you,” Councilman Jason Williams said. “As much as the voters can stomach.”
During the French Market Corporation’s budget presentation on Monday, Councilwoman Susan Guidry asked whether some of that agency’s surplus could be redirected to the library system. Due to increasing rental revenue from its commercial and residential properties, the French Market Corporation’s 2015 budget proposal is $11.4 million next year, up from $8.4 million in 2014. According to French Market director Jon Smith, the agency made good on a pledge to return $1 million to the city this year and plans to do the same in 2015.
Guidry asked if that money could simply go to the library. Budget Director Cary Grant said it has already been used elsewhere in the budget.
Emergency call center
The council also heard from the Orleans Parish Communication District, which is responsible for the city’s 911 call center. Like the library, the communication district will also dip into its reserve fund next year to cover a deficit of about $600,000, Director Stephen Gordon said. The agency’s expenditures are projected to reach $5.1 million next year, with $4.5 million coming in. Gordon estimated it will have about $1 million remaining in its reserve fund after that.
The communication district’s funding comes largely from monthly surcharges on landlines and cell phones. Landline revenues — $1 per line for homes, $2 for businesses — have decreased steadily as people have shed their traditional phones. The communication district’s landline surcharge revenue was just over $2 million in 2013, down from $2.4 million in 2010. It expects to end this year with $1.99 million in landline revenue, and $1.93 million in 2015.
The monthly wireless surcharge rate is 85 cents per line.
“It hasn’t gone up since the late 90s,” Gordon said. But that can only be changed by the state legislature. In 2012, the legislature approved a rate increase to $1.26. It was subject to approval by New Orleans voters, who rejected the increase. Gordon asked the city to back legislation that would either raise the maximum rate throughout the state or remove the requirement that a New Orleans increase goes to a vote.
New Orleans Redevelopment Authority
The council also heard from the New Orleans Redevelopment Authority Monday.
The agency still controls 2,500 Road Home properties left unsold, according to Director Jeff Hebert. Most are in what Hebert called “weak markets,” where demand is low, including about 700 — 28 percent of NORA-controlled properties — in the Lower 9th Ward. Surprisingly, the discussion did not turn to a failed proposal that would have allowed NORA to sell Lower 9th Ward properties for $100 apiece. The proposal, a constitutional amendment on last week’s ballot, was soundly rejected by voters statewide and narrowly failed in New Orleans. But a majority of voters in Lower 9th Ward precincts voted in favor.
Hebert said that his agency is working on project to jumpstart commercial development on St. Claude Avenue in the Lower 9th Ward, as it has previously for Oretha Castle Haley and St. Claude Avenue west of the Industrial Canal, among others. He said he hopes the program will be approved and ready to begin next year.
Hebert was recently appointed the city’s first chief resiliency officer, but he told council members on Monday that he would remain as head of NORA.