By Ariella Cohen, The Lens staff writer
With a week to go before the City Council must approve the city’s 2011 budget, New Orleans’ chief economist has revised his revenue estimates to project $1.74 million more going to the city next year than previously thought.
The increase puts $485 million into city coffers as opposed to the $483 million projected at the last conference in October. Although this means negotiations between the council and Mayor Mitch Landrieu over the budget may be easier than expected, the increase won’t prevent the need for significant haggling between in the next week to balance the budget.
Landrieu has proposed increasing the city’s property tax rate to the maximum approved by voters: a jump of 8.74 mills. The millage increase is expected to raise $23 million. Each mill generates about $2.6 million, meaning that for every $2.6 million cut from the city or raised by alternate means, the council can reduce the property tax increase by a mill.
Unfortunately for the council, today’s projected $1.74 million increase amounts to less than the value of a one-mill increase in property taxes.
The increase in revenue comes from a $930,000 bump in projected sales taxes and a $1 million one-time transfer of surplus funds from the public-benefit corporation that controls parking lots and the Piazza d’Italia in the Warehouse District. But the revenue projection was also decreased by $200,000 due to a revision in money expected from fees levied by the Health Department.
Even if the decision to transfer revenue from the public-benefit corporation won’t solve the city’s budget problem, it represents a victory for the council, which had advocated for the move as an alternative to raising the millage to the ceiling.
In 2011, Piazza D’Italia Development Corporation expects to receive $781,134 in income generated by the operation of the parking lots in 2011, said Cindy Connick, Executive Director of the Downtown Public Benefit Corporations. That comes on top of a $2 million reserve fund the corporation has set aside for future development of the parking lots, she said.
The corporation that controls the Harrah’s Casino lease is the only other to contribute to the general fund. But while Rivergate Development Corp. is legally required to contribute a portion of its earnings annually, the city has described the $1 million coming from Piazza d’Italia as a “one-time” revenue generator.
City Council President Arnie Fielkow applauded the administration for going to the privately run public corporation for a share of its revenue.
“It’s very important that all these public-benefit corporations evaluate what may be out there and available to come back to the general fund,” Fielkow said.