The city of New Orleans expects to collect $504 million in general fund revenue next year, a 2 percent increase over the current year’s projected collections, according to an estimate adopted Friday by the New Orleans Revenue Estimating Conference.
The general fund, comprised of locally collected taxes and fees, pays for most city operating expenses. The overall budget, which includes state and federal grant money earmarked for specific uses, is expected to be $837 million next year, according to the Revenue Estimating Committee. That’s a $2 million increase from 2013.
Mayor Mitch Landrieu will present his 2014 budget before the City Council on Tuesday morning. (The Lens will live-blog that speech.)
Despite the slight bump in revenue, Chief Administrative Officer Andy Kopplin said during Friday’s meeting that the 2014 budget still will be tight. The projected revenues for this year are $494 million.
Landrieu has not yet released his proposal, but city departments are reportedly preparing for 15 percent cuts on average.
That’s because the city faces a number of rising costs next year, including sharply rising workers’ compensation claims and tens of millions in new expenses associated with federal consent decrees over the New Orleans Police Department and Orleans Parish Prison.
The police department’s consent decree is expected to average $11 million per year over five years. The cost of the jail’s consent decree is still unknown, but estimates range from $7 million to more than $20 million annually.
“As tight as this budget is to be building, if we were like other cities, we’d be seeing flat or declining revenues,” Kopplin said.
City Economist James Husserl’s 2014 forecast includes 3 percent increases in sales- and property-tax collections, totalling $7.3 million. The city expects a $1.3 million increase in sanitation fee collections from the Sewerage & Water Board. Kopplin said the bump will result from a soon-to-be introduced ordinance that will allow the utility to shut off water services for customers who don’t pay their $24 monthly trash fee. The Landrieu administration floated the same idea for the 2013 budget but failed to produce an ordinance this year.
The estimate also includes a $1 million general contribution from the French Market Corporation. In a report on the city-controlled nonprofit released this week, the Office of Inspector General noted that the French Market Corporation is required to contribute 20 percent of its net revenues to the city every year.
“Prior to Hurricane Katrina, it was routine for the FMC to make additional annual contributions to the City’s general fund,” up to $1 million in 2005, the report said. But the organization has only reached that contribution level in one year, 2012, since then.
The report criticized the French Market Corporation’s lease of Edison Park on Bourbon Street to New Orleans Musical Legends for $1 per year, even though the group subleases part of it to Cafe Beignet for more than $100,000 per year. The lease is up in early 2014, and the French Market Corporation said in a response to the report that it plans to renegotiate the lease.