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Effective management and saving money are key if New Orleans is continue with its strong budgets

The Advocate

July 16, 2015

With many residents worried about crime and frustrated by delays in all sorts of physical needs like repairing streets, the top line number for New Orleans’ budget next year is pretty good news.

Sales tax collections increased by 9 percent in 2014, for the second year in a row. The recent settlement with BP over the Deepwater Horizon oil spill is set to pour tens of millions of dollars into city coffers.

But at about $500 million, the budget cannot satisfy all needs and wants, and Mayor Mitch Landrieu has to deliver the bad news to a series of community meetings: The city’s budget is limited in addressing some problems because finances are, in considerable part, “in the hands of three judges” overseeing cases involving a suit by firefighters for $75 million in pension payments, a consent decree for reforming NOPD and disputes between the city and Sheriff Marlin Gusman over the funding of the new jail.

The new growth in the city is manifest, and tourism has been a continuing positive for the economy. Yet the long-term financial issues can be tough.

A BGR research study last year described in fuller detail the mayor’s battles with the long-troubled Firefighters’ Pension and Relief Funds. “Poor investments, market misfortunes, an ill-advised financing scheme, underfunding, judgments and excessive generosity have combined to create a crushing burden,” BGR said. The city put more than 10 percent of its general fund toward obligations related to firefighter pensions, BGR said.

And as any driver knows, there are major infrastructure needs waiting for rebuilding and repair. “The Sewerage & Water Board’s recently approved rate increases will cover only a fraction of the estimated $3.2 billion cost of overhauling the leaky water distribution network,” BGR said. “The S&WB is also facing new drainage expenses that are not covered by the recent rate increases.”

BGR added: “In 2010, the Department of Public Works estimated that it would cost $1.4 billion to address the problems with streets and the drainage pipes underneath them.” That’s a lot of money.

Roadwork and blight are going to be top concerns, we suspect, in every community meeting over the new budget and the City Council’s ultimate consideration of the Landrieu proposals. The gradual improvement in police pay shows that city hall is putting the new money into priorities that bother the average citizen.

Every bit of the revenue growth is welcome, given the difficulties in capital costs facing the city and the long-term hangovers left by not only the devastation of the 2005 storms and flooding but by the neglect of hard choices by preceding administrations.

New Orleans is on a roll, but effective management and saving money, in any way possible, is going to be necessary to continue the progress we’ve seen in the past few years.

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