Mayor LaToya Cantrell presents her draft budget to the City Council, which has until Dec. 1 to alter and approve it.
Mayor LaToya Cantrell presents her 2020 budget proposal earlier this month.

The New Orleans City Council launched hearings on the 2020 budget on Monday, nearly two weeks after Mayor LaToya Cantrell released her $722 million proposal.

The annual process will take two weeks of all day hearings, during which city departments and agencies will present to the council to justify their allocation in the draft budget or advocate for more. The first week will occur over the next five days, and the second will occur during the week of Nov. 11.

The council plans to take a final vote on the budget at its Nov. 27 meeting. 

On Monday, the council heard from the city’s Department of Finance, Law Department, Department of Sanitation and Civil Service Department. 

The Department of Sanitation presented its efforts to curb illegal dumping with the use of surveillance cameras under Cantrell’s CleanUp NOLA Initiative. The department is currently using 10 cameras, according to Sanitation Director Cynthia Sylvain-Lear, and plans to add 10 more next year. Early this year, the effort resulted in a conviction and a three-year sentence for illegal dumping. 

“We worked with the attorneys in the DA’s office, we worked with [the Louisiana Department of Environmental Quality], we spoke with the judge, we did everything we could so that when he was sentenced, he was sentenced at the maximum of the three years,” Sylvain-Lear said.

She added that there is another person going through that same process now.

“I’d like to see us be far more intentional to make sure those penalties are as harsh as we can make them,” City Councilman Jay Banks said. “I’m not interested in locking people up for dumping, I’m interested in them not dumping.”

Following a presentation by the Law Department, one resident came up to express his frustration with how the city handles legal judgments and settlements. Under a provision in the Louisiana state constitution, state courts can order government agencies to pay out money to defendants, but cannot force them to do so. 

George White — a former city contractor who sued and won a judgment in 2003 — told the Council that he still hasn’t been paid in full. White said he sued after performing an audit of BellSouth on behalf of the city but was never paid the full contract fee. Councilman Jason Williams said he was familiar with the case.

“We frankly owe this,” Williams said.

City Attorney Sunni Lebeouf said that the city had a list of $40.5 million in unpaid claims against the city. She said that the city made zero payments on those between 2009 and 2017. This  year, the city budgeted $2 million to pay those claims. Cantrell’s draft 2020 budget also includes that $2 million.

“I believe the judgment list needs to be addressed,” Lebeouf said. “I think the 2019 and 2020 appropriation are a start … but additional work is needed.”

Some council members skeptical of Cantrell’s property tax request

But the main event was yet another plea from Chief Administrative Officer Gilbert Montaño for the council to vote to keep the city’s property tax rates where Cantrell has requested them, rather than lowering them further. 

Last month, council members argued that the tax rate should be lowered — or rolled back — to protect residents from the financial impact of skyrocketing property value assessments seen around the city this year. Cantrell administration officials, meanwhile, argued that the rate should remain the same — rolled forward — or at least see a more minor decrease, in order to get more revenue for the city. 

In her budget proposal, Cantrell offered a compromise: a half roll-forward.

This year’s property assessments raised the value of tens of thousands of properties by more than 50 percent, meaning higher property taxes. Some homeowners saw their values triple or double. Thousands appealed and had their values reduced, but even when those appeals are factored in, the overall value of property in Orleans Parish jumped 14.1 percent. 

When property values are adjusted every four years, the state constitution requires the council roll back the property tax rate — reduce the tax rate to a level that will not increase revenues as a result of higher property values. But following that vote, the council has the option to roll the rates forward — increase the tax rate back to what it was before the roll-back, meaning higher taxes and more revenue for the city.

Cantrell’s budget ask the council for a 50 percent roll forward that would put the property tax rate squarely between the full roll back and roll forward rates.

Ultimately, the implications of the 50 percent roll forward are $6.9 million in additional recurring funds. Even though it represents less than one percent of Cantrell’s proposed general fund budget, the issue has become a flashpoint between the council and the Cantrell administration. 

The administration continues to describe the funds as key to funding vital city services.

Councilwoman Kristin Palmer questioned whether the relatively small decrease from a full roll back “is going to slice our essential services.” 

“I just think it’s a bad way of framing this,” she said, adding that if the city can’t find the money through another revenue source, “then shame on us,” 

Council members have previously questioned whether the administration is overstating the deleterious effect of lowering the property tax rate. Last month, Montaño told the council that a full roll back would result in a $20 million to $25 million loss for the city, and result in dire consequences that included mass layoffs at City Hall and department wide budget cuts.

That number apparently included all property taxes collected from anticipated new construction, revenue that the city will receive regardless of the decision, according to city economist Deb Vivien. Still, Montaño maintained that “$6.9 million is a significant portion that is necessary for our quality basic services.”

“Last week I had 14 ambulances on the street when I had staff for 25 or 30,” he said. “I’m 50 firemen short. I don’t have enough officers for cars. I appreciate and understand the balance we’re all trying to have. But there’s a significant need that we have as well.”

Council members have argued that while the city needs more funding, residents are being squeezed out of the city by higher costs of living. They argue that higher property taxes would not only be a risk to lower income homeowners, it would also be a burden to renters because  landlords are likely to pass those costs on to their tenants. 

“The message we’re receiving is the city is increasingly unaffordable to live in,” Palmer said. 

She again stressed that there could be other sources of revenue the city is leaving on the table. She brought up the amount of money the city could be losing because of homestead-exemption fraud and suggested hiring more sales tax collectors to make sure the city was getting everything it was owed. 

In recent months, the council has also discussed cracking down on exemptions for nonprofits and manufacturers that get state tax exemptions. The council also recently created a task force to look into the possibility of creating a parcel fee for property owners. 

Councilman Joseph Giarrusso argued that the impact of a roll forward is just one of many things driving up costs for residents. 

“I’m worried not just about this but death by a thousand cuts,” he said. “I struggle because on the one hand I’m sympathetic to the administration. It’s your job to run the government and you need money to be able to do it. But on the other hand, I’m worried we’re stressing the public not only on one thing, but it’s a litany of items coming up in short order.” 

He brought up a proposed new 3-mill property tax that residents will vote on during the Nov. 16 election. And he brought up millages that will expire in the coming years that voters will also be asked to renew. 

Giarrusso noted that the City Council only has control over roughly a third of the city’s total property taxes. For the other two thirds, the council cannot control whether those rates are roll forward or not. That’s up to other taxing authorities like the Orleans Parish School Board. 

Earlier this month, NOLA Public Schools district officials urged the school board to fully roll forward the schools’ property tax rates. 

The Council is poised to vote on the roll forward at its Nov. 27 meeting. That’s the same meeting at which the council is expected to take a vote on the 2020 budget.

Michael Isaac Stein

Michael Isaac Stein covers New Orleans' cultural economy and local government for The Lens. Before joining the staff, he freelanced for The Lens as well as The Intercept, CityLab, The New Republic, and Pacific Standard. He was recently awarded a fellowship from the Heinrich Boll Foundation, which he used to report on water scarcity, division, and colonialism in Cyprus.