City of New Orleans Operating Revenue

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In order to maintain local government operations the City receives revenue from seven major sources:

(1) Taxes	(5) Miscellaneous Revenue
(2) Licenses and Permits	(6) Fines and Forfeits
(3) Intergovernmental Revenue	(7) Other Financing Sources
(4) Service Charges

The City creates an operating budget based on the expected revenues. The projected revenue is then grouped into funds for purposes of allocation. City operating revenue is organized into the General Fund or ‘other revenue’ funds. If a revenue source is labeled as part of the General Fund, the money will either be used for:

general city operating expenditures to maintain and run local government. In this case the money is used at the City’s discretion for governmental needs to provide public services. This money will be referred to here as unrestricted General Fund.

predetermined purposes. This refers to revenues restricted to a specific department or project. (ex. The police property tax is revenue restricted to the police department. The City does have discretion of how this money is used within the department, but may not use the money for other departments.) The city does not have complete discretion over the allocation of this money. This revenue will be referred to here as restricted General Fund.

If a revenue source is labeled as one of 11 ‘other revenue’ funds the money is earmarked for a specific project/agency/district. Usually the title of these other revenue funds describes how the money has been dedicated (ex. Downtown Development District Fund), or describes who determines how the money may be used (ex. Federal Grants Fund). The City can not use revenue from other revenue funds at its own discretion; the use of the money is determined before it is received by the City.

Below is a description of each revenue source.

(1) TAXES

The revenue from all taxes levied by the city is 44% of the City’s total operating revenues in fiscal year 2000.

Sales tax represents 57% of the tax revenue for the City of New Orleans, which currently has a sales tax rate of 9%. (See Table 1.) This money goes into the General Fund (unrestricted), and is the City’s major tax source. Any increase in the City’s sales tax rate would require voter approval.

A third of City tax revenue is generated by property taxes. The City’s total property tax (46 mills) is divided among various agencies and departments within the City, each with its own millage rate. (See Table 2.) The majority of property taxes categorized under the General Fund are dedicated to a specific department (Fire & Police, Parkway & Recreation, Capital Infrastructure). The General Alimony revenue is the only property tax source unrestricted to a specific department or project. A number of property taxes are considered other revenue funds (Library, Downtown Development District, New Orleans Business & Industrial District, Housing/Economic Development), which means the revenue is dedicated to these specific districts or projects. The other property taxes listed in the table below for Orleans Parish are not a part of the City’s budget, but are used within the budgets of the named agency or board.

The City levies other various taxes, including a utility tax, documentary transaction tax, beer and wine tax, parking tax, chain store tax, and a racing tax. These are all in the General Fund and are unrestricted in their use by the City.

(2) INTERGOVERNMENTAL REVENUE

Intergovernmental revenue refers to money received from the federal and state government, including grants, revenue sharing, and aid. Typically this revenue is restricted to certain projects or departments as defined by the providing government.

Approximately 80% of intergovernmental revenue is from the federal government, received in both the General Fund and other revenue funds. In the General Fund the City receives money for emergency management and Medicaid. Other revenue funds include the Federal Grants and State Grants Funds that are earmarked for specific purposes in the City; the Law Enforcement Assistance Administration Fund that is additional funding for law enforcement; the Housing and Urban Development Fund to improve living environments of lower-income neighborhoods; and the Grants, Contributions, and Transfers Fund reserved for additional grants received by the City throughout the year.

The remaining 20% of intergovernmental revenue is in the form of state funding. General Fund revenue from the State is from video poker revenue, the tobacco tax, revenue sharing, medicaid, parish transportation funds, and other state aid. In addition the State provides funding in an other revenue fund labeled State Grants Fund. This revenue is from the Department of Health & Human Resources, Department of Public Safety, and other state aid sources.

(3) LICENSES & PERMITS

About 13% of the total City budget and is funded by money for licenses and permits needed for various activities and privileges within the city. All of the revenue from licenses and permits is received in the General Fund. About 50% of this revenue source is a franchise fee charged to Entergy. Other licenses and permits include cable t.v. franchise, telephone franchises, occupational licenses, alcoholic beverage licenses, and permits granted for building mechanical/electrical projects.

(4) SERVICE CHARGES

Charges collected from users of City-operated services are 9% of the City’s operating revenues. Service charges for sanitation and curbside recycling are 50% of service charge revenue. Another 46% of service charge revenue is from general government, public safety, parking meters, and reimbursed indirect costs.

(5) MISCELLANEOUS REVENUES

The heading of miscellaneous revenues is used to describe about 8% of the City’s operating revenues. This includes gambling-related revenues from Harrah’s, the riverboat gaming fee, rents and royalties from City-owned property, and interest earned from the operating and capital fund idle balances. These miscellaneous revenues are part of the General Fund. The State and Federal Seizure revenue is put in a fund entitled Self-Generated Funds.

(6) FINES & FORFEITS

This revenue source represents monies received from traffic fines and violations, parking tickets, municipal court fines, and impounded vehicles. All fines are part of the general fund except for Library fines which are part of the Library Fund.

(7) OTHER FINANCING SOURCES

Under this category is included transfers from other sources and repayment of loans to developers from federal Urban Development Action Grant income.

Source:
City of New Orleans 2000 Operating Budget

Last Revised by BGR: August 2000