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The City's long-standing fiscal problems are far from over. In the second half of 1998, the City may be forced to consider layoffs, cuts in services, and/or revenue increases.
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The City's anticipated fiscal problems are due to a combination of overly optimistic revenue projections, the underfunding of essential city services, the perilous nature of major non-recurring revenue sources, and the lack of a "rainy day" fund to deal with fiscal problems or emergencies.
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Even if a revised contract for the New Orleans land-based casino contract is approved, the rental payments the City would receive in 1998 would be insufficient to deal with a shortfall that could be as high as $20 - $25 million.
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If the City is able to find another short-term fix to get through 1998, the City syill has no long-term plan to deal with recurring deficits expected in 1999 and beyond.
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According to BGR, the best prospects for alleviating the City's long-term fiscal problems lie with developing regional strategies for the funding and delivery of local governmental services.
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