In The News › BGR president weighs in on New Orleans budget cuts

Nov 24, 2010

Source: The Times-Picayune

Filed under: Government Finance, Orleans Parish

BGR president weighs in on New Orleans budget cuts

Wednesday, November 24, 2010
By Bruce Eggler
The Times-Picayune

The president of the Bureau of Governmental Research offered some support Wednesday to New Orleans City Council members who have been looking for ways to cut Mayor Mitch Landrieu’s proposed $483.4 million city budget for 2011.

In an open letter to the mayor and council, BGR President Janet Howard said the city could save several million dollars by cutting its spending on economic development, summer youth employment, the mayor’s communications office and a proposed new neighborhood outreach program.

She also said that sanitation service fees should be raised even more than Landrieu has proposed, and suggested raising the city’s 3 percent excise tax on parking in commercial lots and garages.

All those ideas should please council members who want to scale back Landrieu’s proposal to raise the city’s property tax rate by 8.74 mills, which would bring in an extra $23.1 million a year.

However, Howard also called on the council to seriously consider the Sewerage & Water Board’s request to increase its millage by 6.16 mills to generate $16.4 million a year for drainage work.

The council has appeared to be ready to flatly reject the water board’s proposal and to approve at least part of Landrieu’s proposed increase for the city, but Howard urged it to “resist the easy road” and instead assess the two proposals on the basis of which one would “meet the most critical needs of the community.”

Her letter left little doubt that the BGR considers the S&WB, whose “infrastructure is in a dire condition,” as dramatized by last week’s power failure at the water purification plant, to have the stronger claim.

Some council members have made clear they want to reduce Landrieu’s proposed millage increase, which they say would fall disproportionately on business owners and owners of relatively expensive homes.

Councilwoman Jackie Clarkson has said she would like to cut the increase to about 4 mills but is doubtful that the council can agree on enough cuts to slash the increase that deeply. Each mill of property tax produces about $2.64 million, so to cut the increase to 4 mills would require overall spending cuts, or offsetting revenue increases in other categories, of about $12.5 million.

Some of the BGR’s suggestions parallel ideas proposed by council members during recent budget hearings.

Howard, for example, echoed council President Arnie Fielkow in suggesting that spending on economic development be cut by about $2.2 million, with all the money for such programs to come from special funds, not from the general fund.

Councilwoman Kristin Gisleson Palmer has proposed that instead of raising the sanitation service fee from $12 a month to $20 a month per household, as proposed by Landrieu, it should be raised to $23 a month, which would cover the full cost of trash collection at the level envisioned by Landrieu. Howard said that raising both the residential and commercial sanitation fees to cover the full cost of service “would free up an additional $4.5 million in general fund revenue.”

Howard said that instead of spending $2.7 million for a summer employment program that gives jobs to 2,000 young people ages 14 to 24, the city could reduce the total by an unspecified amount by requiring businesses and nonprofits that provide some of the jobs to match the city’s contribution.

The proposed $1 million budget for the Mayor’s Office of Communications is five times the budget for the comparable office in Jefferson Parish and is ripe for “significant belt-tightening,” Howard’s letter said.

It also criticized as “extravagant” a proposed $857,000 budget for a new Office of Neighborhood and Citizen Engagement and a new volunteer initiative called ServeNOLA.

The BGR said the city instead should spend a much smaller amount to carry out the City Charter’s mandate that the City Planning Commission establish a system to ensure neighborhood participation in land-use and planning decisions. The mayor’s budget proposal does not include money for that, it said.

Nov 24, 2010

Source: The Times-Picayune

Filed under: Government Finance, Orleans Parish

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