Without bonds, New Orleans mayor proposes budget cuts

Bloomberg News

Having struck out in an attempt to issue bonds to fund operating expenses, New Orleans Mayor Helena Moreno proposed cutting budget expenditures for fiscal 2027 by 7.6%. 

Chief Administrative Officer Joseph Giarrusso told the city council Tuesday the cuts would balance the budget for the fiscal year, which starts January 1. 

The proposal would reduce general fund outlays by $36.4 million and non-general fund expenditures by $84.5 million. The proposed budget expenditures total $1.471 billion: $763.3 million in the general fund and $708.1 million in the non-general fund. 

Moreno proposed increasing the property tax millage rate, which would require city council approval, but not voter approval. This would generate $26 million in revenues next year. The administration also wants to increase short-term rental fees and permit fees, with an anticipated yield of $7 million. 

Giarrusso said the mayor was proposing closing a homeless shelter, cutting dozens of positions and cutting post-Mardi Gras parade cleanup spending, among other things. 

Moreno hates to make these cuts, Giarrusso said Monday, but she feels she must. 

"The 2027 budget will be lean," Moreno said in a written introduction to her budget. "There is no room for waste and every dollar must be focused on delivering for our people. We will continue streamlining operations, sharing resources, building in-house capacity where it saves money and demanding accountability for every public dollar." 

The city council is expected to approve a budget in November.

City Council President Jean-Paul Morrell said Tuesday with a roughly $100 million shortfall, there's no way to make cuts without pain. 

New Orleans last fall found itself unable to meet expenses for the remainder of the year due to overspending in the last mayoral administration and delays in receipt of federal money. The State Bond Commission approved $125 million revenue anticipation notes, which were issued that fall and paid back earlier this year.  

The city planned to return to the bond commissionin July for approval of $110 million of bonds for operating expenses but Moreno withdrew the request, saying she heard there was inadequate support on the Republican-dominated commission for the bonds. Moreno and all city council members are Democrats. 

New Orleans is rated Baa2 with a negative outlook by Moody's Ratings, BBB-plus with a negative outlook by S&P Global Ratings and A-minus with a negative outlook by Fitch Ratings.