The City of New Orleans is at a tipping point. As the races for mayor and City Council heat up, frustrated residents are demanding better City services and infrastructure. Meanwhile, the City’s improved post-pandemic financial position is at serious risk as the 2025 budget is on pace for a $102.5 million shortfall, with new costs looming in 2026 and beyond.
Against this backdrop, the Bureau of Governmental Research (BGR) released a report today that provides recommendations for the current mayor and council to improve the City’s financial management practices as they prepare and adopt the 2026 budget. They should hand their successors a more financially secure City government to better address residents’ needs and deal responsibly with any fiscal crises.
The report follows BGR’s April report entitled After the Windfall which found the City has a limited window to safeguard financial gains it made during the pandemic thanks to nearly $400 million in federal funding. Just five months later, that window has narrowed even further. The $102.5 million projected deficit is due to a $30.5 million reduction in estimated revenues and personnel costs that are running $72 million over budget, primarily from soaring overtime. The City also faces tens of millions of dollars in looming costs – such as deferred maintenance of infrastructure and facilities – that aren’t part of the deficit but will put additional pressure on the City’s budget.
To deal with these challenges, BGR urges the City administration and council to improve their financial management practices by (1) working to achieve a structurally balanced budget that covers the full costs of responsibly running City government, (2) developing a five-year financial plan to get there, and (3) adopting a policy to manage and safeguard the City’s financial reserves or “rainy day” fund.
Click the button below to read more, or click here to download the full report and media release.