At a Monday press conference, New Orleans Mayor LaToya Cantrell announced that the city was ending partial furloughs for city employees with the city’s health department, fire department, police department and emergency medical services, as well as the Juvenile Justice Intervention Center — the city’s juvenile detention facility. The city implemented one furlough day every pay period for almost all city employees in October in response to a budget crisis related to the coronavirus crisis.
Cantrell said the move ending the furloughs was the “first step on the city’s road to recovery.” She also indicated that it was also the first step in a larger plan to restructure the city’s workforce.
“We are making this move as a part of a much broader effort to restructure how we use our public servants, our public employees, in the city of New Orleans,” she said. “Everyone needs to have that shared sacrifice and do what it takes to move this city forward. … In the weeks ahead, we will come before you with specifics as it relates to emergency response, business response, community response and organizational changes as it relates to the City of New Orleans.”
Cantrell said the city was ending some furloughs with additional funds the city is projecting in a more optimistic outlook. If those funds don’t materialize, however, the move could cause layoffs later in the year, she said.
The city planned to continue the furloughs through the entire year as a cost-saving measure. But now, just four days into the year, public safety agencies have been exempted. The public safety furloughs have been criticized by police and fire labor leaders for putting residents in danger. On Monday, the directors of the NOPD, NOFD, EMS and New Orleans Health Department all applauded the decision.
Cantrell said the decision to include Juvenile Justice Intervention Center employees was related to consistent staffing issues and the need to stay within state guidelines.
It’s a costly move, however, that will erase more than half the savings the city was hoping to capture with the furloughs. The furloughs, as originally planned, were projected to save the city $28.6 million this year, according to city Chief Administrative Officer Gilbert Montaño. The plan to lift furloughs for some departments will affect 2,243 employees and will cost the city $16 million, he said on Monday.
“We’re going to utilize about half,” Montaño said.
Cantrell and Montaño both made it clear that the city hadn’t actually realized any new funds to pay for ending the furloughs. Instead, the decision was made based on more optimistic budget projections due to the rollout of coronavirus vaccines and the city’s confidence that the federal government will eventually pass another round of stimulus funding to aid local governments.
The announcement came the same day that Louisiana reached a milestone in its nascent vaccine rollout program. Since the vaccine first became available in Louisiana in December, access has been restricted to frontline medical workers and staff and residents at nursing homes and long-term care facilities. But on Monday, the state expanded eligibility to include all people aged 70 and above, as well as additional medical personnel that weren’t covered in the initial group.
Doses of the Moderna vaccine have been distributed to 107 pharmacies across the state. It’s a major step, but as Cantrell administration officials warned on Monday, the state doesn’t yet have nearly enough vaccine doses to allow a return to normalcy. As of Monday, 10,500 doses were sent out to pharmacies, while the new eligibility “tier” includes an estimated 640,000 additional people.
“We are not out of the woods at all,” Cantrell said.
Meanwhile, the virus is surging across the state and country.
“We are in a really dangerous spot,” Dr. Jennifer Avegno, director of the city’s Health Department, said on Monday. “We are approaching the highest level of hospitalizations that we’ve seen statewide… I think we’re within 20 COVID hospitalizations of where we were at the peak in March and April.”
Still, the city is hoping that at some point this year, vaccinations will lead to greater tourism spending and, therefore, more sales tax collections for the city.
The first major COVID-19 stimulus law, the CARES Act, provided limited aid to local and state governments — reimbursements for coronavirus-related expenses — but no help for lost revenues. A second federal coronavirus aid package Congress approved in December didn’t include any direct funding for local governments — a sticking point between Democrats and Republicans in Congress. A bill passed by the Democrat-controlled House of Representatives in October that failed to pass through the Republican-controlled Senate included $436 billion for state an local government aid. (An earlier version of the bill, which also died in the Senate, provided even more state and local aid.)
But top Democrats, including Biden, have indicated that they will work for additional stimulus spending once he takes office, and that aid to local and state governments is high on their priority lists.
“As for the stimulus, we will continue to advocate, lobby at the highest level,” Cantrell said on Monday. “We’re confident at some point that local government, the city, will get resources.”
Cantrell administration officials on Monday stressed that was only optimism, and that the fate of federal aid and tourism spending remained unclear. If those funds don’t materialize, they said, the city will have to look at other options later in the year, including layoffs and spending down a $50 million line of credit the city opened last year in case it ran out of cash.
The city’s Chief Financial Officer Norman White explained that the city collects most of its revenue earlier in the year, in large part due to property tax collections. That means that if it becomes necessary to borrow money or fire employees, those decisions will come later in the year.
Administration officials said that they would remain vigilant and agile in response to the unknowns, and that recovery would come quicker if residents stick to health guidance from the city and state.
“We still need to you to wear those masks, keep your distance, wash your hands and just follow the guidelines of the City of New Orleans and State of Louisiana,” Cantrell said.