New Orleans Mayor LaToya Cantrell’s administration is seeking to implement a plan that would furlough thousands of city employees one day per pay period for the remainder of the year as a cost saving measure necessitated by the economic toll of the coronavirus pandemic, Cantrell announced at a Monday press conference. The furloughs would affect all city employees, including Cantrell herself.
“We have had better days in the city of New Orleans,” Cantrell said. “I come to you with a heavy heart.”
Cantrell called on the Civil Service Commission to “fast-track” the plan that would furlough all “classified” civil service employees — roughly 4,000 people, the majority of the city’s workforce — for one day every pay period through the end of the year, which equates to six total work days.
That Civil Service Commission decision wouldn’t apply to the roughly 600 “unclassified” political appointees. But Cantrell said that they will be asked to also take on one furlough day per pay period through the end of the year just as classified employees will have to. Unlike classified employees, however, they will be expected to work five days a week nonetheless.
“That is the expectation they will show up,” she said. “It will be that or not having a job at all.”
Cantrell also asked other elected officials to join her in taking a voluntary pay cut without reducing work hours.
Since the pandemic struck New Orleans in March, the city has taken a number of steps to cut spending and try to reduce what they estimate is a $150 million budget shortfall. The city has also been able to tap one-time funds, including $60 million in funding from the federal CARES Act.
“It’s just not enough,” Cantrell said. “We’ve done everything possible, everything in our power, to avoid taking personnel actions.”
But even taking those savings and one-time revenues into account, the city is still facing a $41 million shortfall that it has to fill by the end of the year, according to Chief Administrative Officer Gilbert Montaño.
The furloughs are one strategy being employed by the city to fill that remaining gap, expected to save $6 million through the end of the year. Montaño said the remainder of the $41 million shortfall will be filled by cutting or reducing contracts, encouraging early retirement of city employees and keeping vacant positions unfilled. The city is currently projecting $22 million in savings from unfilled vacant positions, Montaño said.
Cantrell encouraged the Civil Service Commission to approve the furlough plan, saying that more extreme measures could be necessary otherwise.
“We’re asking that they’re favorable to this request. Because at the end of the day, if they’re not, we will have to double down.”
Even if the Civil Service Commission approves the plan, it appears that more furloughs and cuts are around the corner. In her letter to the commission, Cantrell warned that 2021 could see an even worse budget shortfall in the absence of $110 million of one-time funds that the city was able to secure this year as a result of a lawsuit judgement with Harrah’s Casino and from the federal CARES Act.
“Unfortunately, I anticipate that I may need to make additional requests of the Commission in the coming months,” Cantrell said in a letter to the Civil Service Commission. “As we approach the 2021 budget cycle, the City is facing revenue shortfalls as severe as we experienced in 2020, but without the expectation of the one-time funds or federal funding for 2021. We will only be able to reduce personnel expenditures enough to fill this funding gap through some combination of furloughs, pay reductions, and/or layoffs. When we introduce the 2021 budget at the end of this month, that budget will necessarily include personnel spending cuts.”
Correction: This story originally stated that employees would be furloughed one day per week. The story has been corrected to indicate that the furlough will only be one day per pay period.