Mayor Cantrell’s 2024 plan for New Orleans: more spending on police and ‘quality-of-life’ issues

By Sophie Kasakove

Source: The Times-Picayune | Nola.com

October 25, 2023

Mayor LaToya Cantrell wants to tackle some of New Orleans’ most stubborn issues over the next year: public safety, infrastructure and improving residents’ quality of life. But anyone looking for major new initiatives from the mayor who has two years left in her second term won’t find them in the 40-slide budget presentation delivered to the City Council on Wednesday.

According to Cantrell and her staff, that’s by design.

“There’s probably not going to be something bright and sensational on this particular budget,” said Gilbert Montaño, the city’s Chief Administrative Officer, in an interview Tuesday. Instead, the budget represents “a significant investment in systems — non-sexy things that we think will develop, over the course of time, better governance, better management, better oversight.”

The 2024 budget, which must be approved by the council by Dec. 1, is part of a three-year budget plan, beginning with last year’s, Cantrell said. The goal is to use the city’s massive windfall of one-time federal coronavirus relief funds to address issues oft-cited by New Orleans residents. About 60% of the relief funds have been spent so far, according to the city’s American Rescue Plan Act spending tracker.

The proposed $1.57 billion budget for 2024 — up from $1.47 billion last year— is designed to continue to spend those funds down. And like last year, it continues to invest in law enforcement. The plan includes 5% raises and merit pay for police officers and funding for IT system improvements.

It also commits funding towards infrastructure and quality-of-life issues like blight and graffiti abatement, reforestation efforts and services for people experiencing homelessness.

“We’ve laid that foundation in ’23, so now in ’24 it really is to stay focused and to continue to deliver on the results and work that we have seen in this year of 2023,” said Cantrell on Wednesday.

The “steady state budget,” as Montaño called it, follows repeated calls from housing and criminal justice advocates to use the influx of federal funds to make far more sweeping changes to the city’s approach to public safety and equity issues.

At a press conference outside City Hall before the mayor’s budget presentation, advocates with the Big Easy Budget Coalition issued their demands once again.

“The American Rescue Plan dollars really offered New Orleans a once-in-a-lifetime opportunity to move in a different direction and recover from the pandemic and recover from years of inequity,” said Sarah Omojola, director of Vera Louisiana, a local initiative of the Vera Institute of Justice. “Instead the ARPA dollars— the American Rescue Plan dollars— were used to plug budget holes and invest in policing.”

Two weeks of departmental budget hearings are scheduled to begin next week in City Council chambers, ahead of a vote.

The budget season comes at a time of unparalleled tension between the council and the mayor. Last year, though, the council put their differences aside to approve the vast majority of the mayor’s proposed spending plans.

This time around, with the mayor regularly noting in public appearances the number of days until her term ends, Cantrell said she is hoping that the budget discussions over the coming weeks will improve relations.

“I hope that we can come out renewed, transformed, and with a real reset of how we work together and how we demonstrate respect and dignity in the work that we all do,” said Cantrell to council members on Wednesday.

Revenue projections
The Cantrell administration expects general fund revenue of more than $762 million, driven by sales taxes, property taxes, licensing and permitting fees, and more. The remainder of the operating budget is funded via revenues earmarked for specific purposes like federal and state grants and specific districts’ property tax funds. Those revenue projections suggest that the majority of the city’s revenue streams will return to pre-pandemic levels, according to Montaño.

The projected general fund revenue also reflects an increase of nearly $19 million from a revised forecast for 2023. That increase stems mostly from increases in property tax revenue, thanks to new construction. Much of it will be used to pay for 2.5% across-the-board raises for city employees and increased health care and pension costs, Montaño said.

The budget did not include higher collections based on the city tax assessor’s quadrennial re-assessment. Instead, city officials say they plan to accept lower rates on millages collected by the city to avoid increasing the annual cost for property owners.

The budget also did not project any revenue from taxes, licensing fees, and state revenue funding related to short-term rentals. That put a $20 million hole in the budget, Cantrell told the council on Wednesday. The city’s ability to ultimately collect revenue depends on a federal judge, who has yet to issue a decision in a lawsuit over new short-term rental rules.

City officials also project a 1.4% drop in sales tax revenue for 2024, due to a tapering off of the rebound in tourism over the past year.

Rainy day fund
This year’s budget maintains a hefty line item from last year: a reserve fund for the city to dip into in case of emergencies of roughly $130 million.

The city has accrued a large fund balance since 2019. Montaño has argued New Orleans should maintain this large reserve to be able to front money for disaster response and to boost the city’s image in the eyes of rating agencies.

As a share of the city’s general fund expenditures, the proposed fund balance is roughly 17% — in line with guidelines recommended by the Government Finance Officers Association.

The fund balance has drawn criticism from advocates, who say that the city should use the money to address crises facing residents now. In a May report, the Bureau of Governmental Research sent a letter to Cantrell expressing “concerns” about the lack of transparency and planning for preservation of the fund balance.

Montaño said he expects the fund balance could rile opponents once again this year. “There could be some ambitious folks who would like to dole that out,” said Montaño on Tuesday. “It’s short sighted.”

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