The New Orleans City Council formally adopted a $1.14 billion city budget for 2021 on Thursday after seven days of department by department hearings. Those hearings, and the resulting 2021 budget, were overshadowed by the deep revenue shortages caused by the coronavirus crisis and a high degree of uncertainty as the city tries to predict a historically unpredictable year.
“It’s a very unusual budget and unusual year,” said Councilman and Budget Committee Chair Jared Brossett. “This has been by far the most grueling budget cycle we’ve had.”
Almost every city department and agency is facing cuts next year, with some facing cuts of 30 to 40 percent. The cuts include public safety agencies like the fire department, police department and emergency medical services, as well as the Department of Health, which has taken the lead of the city’s coronavirus response.
“This is a somber budget,” said city Chief Administrative Officer Gilbert Montaño. “This is not going to be a budget that anyone particularly likes. We know this budget is not enough.”
Since the pandemic struck in March, the city has instituted citywide furloughs, hiring freezes and spending cuts as recurring revenues — such as sales taxes, hotel taxes and traffic camera fines — fell dramatically. But cuts will be even deeper next year, and partial furloughs for most city employees are slated to continue through 2021.
The city’s general fund is expected to be $634 million next year. That’s $92 million less than what was budgeted for 2020, or $50 million less than the revised post-coronavirus general fund budget for this year.
The city is planning for a general fund decrease from 2020 to 2021 even though it expects to make some gains in major recurring revenue categories like sales taxes. That’s because this year, the budget losses were softened by $100 million in unexpected one-time payments, including from the federal Coronavirus Aid, Relief, ane Economic Security Act.
The big question is whether the city will get similar levels of unexpected funds this year, either through federal aid or a stronger-than-expected economy. The city budget passed on Thursday is built around the expectation that it won’t. But council members on Thursday expressed some optimism that the city might get funding help from the federal government through another coronavirus stimulus bill. Councilwoman Helena Moreno said that she felt more confident since the recent victory from President-elect Joe Biden.
The council passed a resolution on Thursday laying out the city’s top priorities in the event that it does find some unexpected cash. The resolution dictates that extra funds will first go to eliminating furloughs for public safety agencies, then to eliminating furloughs for the remaining city workforce and reimbursing employees for past furlough days.
“If revenues are realized throughout 2021, our top priority is funding public safety,” Moreno said. “Also our top priority is the employees at city hall, who currently are dealing with cuts to their paychecks because of furloughs they’re facing right now in 2020, and will also be facing in 2021. So funding public safety and also making our employees whole are our top priorities should additional money be realized, whether that’s through additional funding from the federal government, if there’s another stimulus package, or whether… tax overall collections increase.”
Councilman Joe Giarrusso indicated that the city would be using a broad definition of “public safety.”
“It’s not just the police, fire and EMS — the frontlines of public safety,” he said. “Code Enforcement, City Planning, Safety and Permits, Health, Sanitation, [the Department of Public Works] and others are crucial public safety agencies.”
That resolution also provides a potential increase to the budgets for the Department of Safety and Permits and the City Planning Commission. On Dec. 5, Orleans Parish voters will decide on a package of property taxes as part of an overall tax plan from Mayor LaToya Cantrell. One of them would generate roughly $4.6 million a year for economic development.
The council resolution dictates that if the economic development property tax is approved by voters, 10 percent of those proceeds will go to fund salaries at the City Planning Commission and Department of Safety and Permits. This measure was sponsored by Councilwoman Palmer, who argued during budget hearings last week that the city’s inability to quickly and safely process business and development permits was getting in the way of economic growth.
“One of the concerns we’ve had from the very beginning is cuts in CPC and safety and permits will actually have an impact on getting work done within the city,” Palmer said. “The connection between these departments and economic development is very clear. This resolution just shows what our intent is as a body.”
The budget passed by the City Council on Thursday had few changes to what Cantrell originally proposed in October. The biggest change was increases to the Orleans Public Defenders office. The office was facing a 20 percent cut in city funding, even though the City Council passed an ordinance in August that was meant to bring its budget more in line with the Orleans Parish District Attorney, which receives millions more from the city each year.
Ultimately, the City Council added another $1.8 million to the public defender budget by decreasing the budgets of the Orleans Parish Sheriff’s Office, the District Attorney’s Office and the Clerk of Criminal Court.
The City Council also amended the proposed budget to allocate $250,000 to buy public safety and illegal dumping surveillance cameras in eastern New Orleans. The $250,000 is being taken from penalties Entergy paid the city over its use of fake actors and its failure to maintain adequate reliability standards.
