In The News › Council to vote on budget today

Dec 1, 2010

Source: The Times-Picayune

Filed under: Government Finance, Orleans Parish

Council to vote on budget today

Tax increase likely, but size is uncertain

Wednesday, December 01, 2010
By Bruce Eggler
The Times-Picayune

After three weeks of public hearings and two weeks of private negotiations among members and with Mayor Mitch Landrieu’s administration, the New Orleans City Council today will vote on the city’s operating budget for 2011.

Landrieu on Oct. 15 proposed a $483.4 million general fund budget that called for increasing property taxes by $23.1 million and sanitation service fees by $11.5 million.

The general fund is the portion of the budget, raised through taxes and other self-generated revenue sources, that the city can spend as it pleases. The city’s total 2011 operating budget, including federal and state grants over which the city has limited control, is projected at $801 million.

It seems likely that the council today will approve both a property tax increase, though perhaps a smaller one than proposed by Landrieu, and a sanitation fee increase, though possibly more than the mayor suggested.

Council members, however, have said almost nothing publicly about their plans since ending their hearings Nov. 15.

At that meeting, a newly formed group named the New Orleans Coalition on Open Governance called on the council to make its intentions known a week before today’s meeting so the public would have a chance to review and comment on whatever changes the council wants to make.

Council President Arnie Fielkow, also chairman of the Budget Committee, said the council would try to meet that goal, but no announcements were forthcoming last week, and discussions about possible changes reportedly were still going on Tuesday afternoon.

As in the past, then, the public will get its first look at the final budget document on Dec. 1, the deadline set by the City Charter for the council to act.

During the council’s contentious review of former Mayor Ray Nagin’s last budget proposal in 2009, Councilwomen Stacy Head and Shelley Midura made public some of the changes they wanted before Dec. 1, but this year’s negotiations have been kept almost completely under wraps.

Each member was asked to submit a list of changes he or she wanted to Fielkow, who then took the lead in trying to turn them into a final plan that could win majority, possibly unanimous, approval.

Councilwoman Jackie Clarkson said publicly she would like to see Landrieu’s proposed 8.74-mill increase in property tax rates cut by half, but she admitted it was unlikely the council could agree on enough spending cuts or compensating revenue enhancements to make that large a cut possible.

The 8.74-mill increase would raise a typical property owner’s total tax bill by about 6 percent, not counting taxes imposed in specific geographic districts such as the Downtown Development District.

Unlike Nagin, who vetoed the budget the council passed for 2009 and announced what council members regarded as deliberately damaging service cuts to force changes in the council-approved budget for 2010, Landrieu has promised to implement whatever budget the council passes, as long as it is balanced, as required by the charter.

Since Landrieu announced his budget proposals, officials have increased the city’s revenue projection for 2011 by $1.73 million, meaning the total budget could be as much as $485.2 million.
Wary of tax increase

However, several council members, including Clarkson, Fielkow and Head, have made clear they would like to reduce the proposed increase in property taxes, which — because of numerous exemptions — critics say falls primarily on business owners and owners of relatively expensive houses.

Nagin proposed property tax increases in 2007 and 2008 in the wake of a citywide reassessment that resulted in a 27 percent increase in the total assessed value of property in the city, prompting a “rollback” of millage rates to keep the city’s actual revenue from property taxes flat.

The previous council rejected both of Nagin’s tax increase proposals. Landrieu’s call for an increase that would in effect reverse the 2007 rollback was initially expected to face a more favorable reception.

However, even though council members have praised the new mayor and his top aides for involving them in the budget-making process far more than Nagin did, his property tax proposal came under fire as soon as the council began its budget hearings.

Some members suggested that as a partial alternative, the sanitation service fee, which Landrieu suggested raising from $12 a month per household to $20 a month, should be raised to $23 a month, which officials said would cover the full cost of collecting household trash, provided that the city realized all the cost reductions Landrieu envisioned. However, it is uncertain that the city can get its sanitation costs down as far as Landrieu’s budget projects. Although the city has renegotiated the contracts of two of the three companies that collect trash, the size of the third contract remains in question, and it’s not even clear how much one of the other two companies will end up getting.

SPCA, sheriff’s financing

There also are questions about several other spending items. The administration proposed giving the Louisiana SPCA only $1.5 million in 2011 to provide animal control services, more than $1 million less than the organization says it needs, and SPCA backers have flooded council members with messages urging them to increase the amount.

There also are questions about the size of the budget proposed for Sheriff Marlin Gusman’s office. Even with the number of inmates in the city’s jails falling, it’s uncertain whether it will fall far enough in 2011 to cut the city’s bill for housing and feeding them by as many millions as Landrieu’s budget projects.

The president of the Bureau of Governmental Research last week said the city could save several million dollars in 2011 by cutting its spending on economic development, summer youth employment, the mayor’s communications office and a proposed new neighborhood outreach program. Landrieu fired back in a public letter defending the value of the programs.

It seems likely that the council, as usual, will end up approving reductions in a few programs and increases in a few others.

As in past years, though, what those changes are will become apparent only at the last minute, as the council once again goes down to the wire before making its decisions.

Dec 1, 2010

Source: The Times-Picayune

Filed under: Government Finance, Orleans Parish

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