Mayor Mitch Landrieu presented his $537 million 2015 general fund budget — locally generated money over which the city has direct control — to the City Council Wednesday morning. The budget includes funding increases for nearly every city department above 2014 and more than 100 additional full-time positions.
It represents a 6 percent increase over the $505 million 2014 budget he submitted this time last year, though that figure increased to $520 million as better-than-expected revenue was received.
The city’s total operating budget, including federal and state funds, is $957 million. The city’s proposed capital budget, which finances major infrastructure improvements and is funded with a combination of federal and state money and bond sales, is $265 million.
Nearly every city department budget will either be increased or remain the same under the 2015 proposal. Total departmental budgets will increase $31 million above 2014, according to the budget document, with money for 150 police recruits and 5 percent across-the-board raises for the New Orleans Police Department, as well as a minimum wage increase and paid maternity leave for city workers. And unlike Landrieu’s 2014 budget, which counted on 170 full-time positions lost to attrition, the 2015 proposal adds about 127 full-time positions.
“Revenue is up and so we can invest more in what the people of New Orleans say they want,” Landrieu said, adding, “Make no mistake there is a long way to go, and there are looming liabilities on the horizon.”
Landrieu’s 2015 general fund budget, in contrast to his 2014 budget, accounted for two of the city’s most pressing fiscal problems: the firefighters pension system and the federal consent decree over Orleans Parish Prison.
Landrieu pledged $11.7 million more to pay for the pension fund, bringing the total for next year to $43.4 million. Fire pensions are the subject of ongoing litigation between the city and the pension board. At issue was how the city calculated its payment to the fund, and whether it was based on the fire department’s budget alone or the budget plus the fund’s needs as determined by an actuary. A state judge ruled in favor of the latter that the city underpaid the fund by $17.5 million in 2012, and the city’s attempts to appeal have failed.
At a press conference before his presentation to the council, Landrieu said the 2015 proposal covers the full actuarial request. However, Nick Felton, the head of the firefighters’ union, later told reporters that while that was true for 2015, the city still owes back pay for previous years. Felton could not say how much, but according to a report by NOLA.com/The Times-Picayune, it could be more than $30 million.
The $4.4 million for the consent decree brings the Sheriff’s Office’s core funding to $28.5 million, $35.6 million after “in-kind” costs like fuel, utilities and workers compensation.
Minutes before the mayor’s press conference, the city’s Revenue Estimating Conference adopted a $536.9 million general fund revenue estimate as the official number to be used in budget talks.
The 2015 figure is more than $30 million above the $505 million 2014 budget passed by the City Council last year. And it’s nearly $17 million more than the current 2014 end-of-year forecast of $520.1 million.
The biggest increase in revenues comes from sales tax collections, which are expected to grow by $8.1 million.
The budget doesn’t rely on a tax proposal going before voters on Nov. 4. One, an amendment to the state constitution, would raise the cap on special property taxes for police and fire services, allowing the city to double those taxes. That has to be approved statewide in November and then in a city election later to take effect. It will not be approved in time for 2015 property tax collections, though, because a deadline to place the citywide vote on the December ballot passed over the summer. The earliest that election can take place is March 2015.
But another proposal that would allow Sheriff Marlin Gusman to use tax revenues from the Orleans Parish Law Enforcement District — originally levied to pay off bonded debt — instead for jail operations, could hurt the overall city budget. The proposal is also on the November ballot.
Should it pass, the city plans use FEMA dollars to pay for projects that receive Law Enforcement District funds, reducing the district’s annual expenses. In total, Kopplin said, the moves could free up up to $8 million annually for jail operations to cover the consent decree. Total annual funding for the consent decree has not yet been determined, but it’s estimated that it could cost between $10 million and $22 million per year above Gusman’s 2013 budget.
Kopplin pointed out that between the $2 million in additional funding the city provided this year, the $4 million it plans to add this year, and the $8 million in Law Enforcement District money, Gusman would be most of the way there without a tax increase. If voters don’t pass the proposal, and the federal judge overseeing the consent decree orders significant funding increases for the jail, the money will have to come out of the rest of the city’s budget.
City Council budget hearings begin on Oct. 27. The Council is scheduled to vote on the budget on Nov. 20.