A proposed property-tax increase on the May 2 ballot has been presented to the public as make or break for the financially troubled New Orleans Public Library. However, the future of the library system ultimately would be up to Mayor Mitch Landrieu and the City Council if voters reject the proposition.
The library clearly would be buoyed for many years by the increase in tax revenue, but city officials could shift money to achieve the same results — if they deem the system important enough.
Representatives of the mayor and council budget chairwoman Stacy Head did not respond to requests for comment on this issue.
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The library is facing serious financial problems. The system already has a dedicated property tax of 3.14 mills, expected to generate $9 million this year. But its operating budget is more than $12 million. Its reserve funds, which have made up about a quarter of its annual budget in recent years, will soon be gone.
Without the new revenue, voters have been told, the library will face branch closures, drastically cut hours or some combination of both. But Charles Brown, the library’s executive director, said he’s not yet sure which branches might be closed or how hours might be cut.
“Something fairly significant’s going to have to occur, but what that would look like is still not altogether clear,” he said. “If we have to start losing staff, that will kind of determine how many hours we need to be open or how many locations we can operate.”
A department apart
The city hasn’t funded the library directly since the mid-1980s, except for occasional small contributions.
“They’re part of city government.” said Janet Howard, director of the Bureau of Governmental Research, which recently came out against the millage proposal. “It’s not been their practice now, but that’s not to say it couldn’t be their practice.”
The watchdog agency’s recommendation against the tax was a major point of discussion at the New Orleans Public Library’s Board of Directors meeting Tuesday.
The group said the library should not ask voters to approve a tax because it doesn’t have a strategic budget and operational plan. The group suggested the library develop such a plan and try again in the fall.
The report also criticized the library and the city for using federal money to reopen branches that had been closed after Hurricane Katrina without a long-term funding source to operate them. Beginning in 2012, the library supplemented its current property tax revenues with reserve drawdowns totalling $2.7 to $3 million per year.
The proposed 2.5 mill increase — $6.25 on a $100,000 house with a homestead exemption, $25 without one — is expected to generate $8.25 million annually, according to the ballot language. The library’s yearly tax revenue would increase from $9 million to more than $17 million. Hours could be expanded, and the Nora Navra branch could open with a full staff.
Without it, library officials say, the library could have to close as many as seven branches or cut systemwide hours by 35 percent.
Board member Lee Reid said the library knew all along that it would need additional revenues to operate once branches were reopened, and the board assumed the city would call for a vote on a millage increase sooner.
The City Council is responsible for calling for votes on tax increases.
“From the very beginning, the only thing we can do, and we’ve known this, is to figure out a greater source of funding,” he said. “And that’s why we’re going to the voters at this time.”
Citywide budget crisis led to separate funding
The city paid for the library through the general fund until 1987, the year after voters passed the current millage. It was originally 4 mills, but the City Council reduced the rate slightly to the current 3.14 in 2007.
The library’s budget had been severely cut in 1986 due to a $30 million city deficit, The Times-Picayune reported in late October 1986, days before the millage vote. The article describes an infestation of rats and roaches in the main branch because the system couldn’t pay for pest control. The Gentilly branch had to close its bathrooms because its custodians had been laid off. In news reports throughout the year, the millage was presented to voters as a way to make the library sustainable and independent from the year-to-year fluctuations in the city budget process.
Between then and the mid-1990s, the library received no general fund money, according to a 1996 report on city budget negotiations in The Times-Picayune. According to the newspaper, the library’s board asked for $2.2 million from the city for the next year but only received $100,000 to buy new books. Since Landrieu took office in 2010, the city has adopted two general fund allocations for the library — $200,000 in this year’s budget and $180,000 in the 2011 budget.
Brown said the library has not had any discussions with the city about what would happen if voters reject the tax increase.
“We still have approximately a year, roughly, before our reserves would be exhausted, and so those conversations have not taken place at this point,” he said. “We have not yet crossed that bridge.”
The city’s next fiscal year begins on Jan. 1. Next year’s budget vote won’t come until late fall, but city departments typically begin budget negotiations with the administration in June.
A specific tax doesn’t preclude other city money
Other city departments that receive dedicated millages, including the Fire Department, the Police Department, Parks and Parkways, and recreation, also receive general fund dollars.
In some cases, those departments’ general fund budgets went up even during leaner budget years. In 2011, the year after Landrieu came into office with a deficit totalling tens of millions from the previous administration, the city increased the recreation budget by $3 million. The next year, when most departments saw cuts between 5 percent and 10 percent, the city approved a $9 million increase for the Police Department’s general fund budget.
The city’s revenue projections from late last year projected ending this year with a $17 million surplus. Still, that money and more may be spoken for. The city faces potentially massive costs for items like the Orleans Parish Prison federal consent decree and two legal judgements, totaling more than $100 million, involving back pay and retirement contributions for the fire department.
Councilwoman Latoya Cantrell, who supports the millage proposal, did not say whether she would support a general fund contribution for 2016.
“First and foremost, the Council has fully supported this millage and is advocating for voter approval,” said an emailed statement, attributed to Cantrell, from spokesman David Winkler-Schmit. “If it did fail, allocating money from the general fund would depend on what the other budgetary considerations are for 2016. Hopefully, this question will become moot with the passage of the millage increase on May 2.”
Library Board Chairman Bernard Charbonnet, interviewed after the board meeting, said he’s not holding out much hope for a large check from City Hall if the vote fails.
“The problem is with the stressed needs of the city’s general fund. I can’t tell you that there is any money for the library,” he said. “We go to the City Council annually. We go to the mayor annually. And we go with hat in hand begging for money. We just do not get it. I don’t believe they have it, which is why we’ve come to this.”