Rainy day fund is vital to New Orleans’ financial future, mayor says
By Mayor Mitch Landrieu
Source: Letters to the Editor, NOLA.com | The Times-Picayune
November 17, 2017
In 7 1/2 years, together with the City Council and the people of New Orleans, we have righted the ship of government. Today, our financial house is stronger, going from a budget deficit to a budget surplus, and our bond ratings were upgraded to their highest levels ever. But our work is not done. Even with our current financial strength, what we have always lacked is a source of dedicated funding in times of emergency.
To that end, we’re proposing that we establish the first ever Rainy Day Savings Fund for New Orleans on the Saturday (Nov. 18) ballot. This would set aside 5 percent of the general fund in the fund balance for cases of emergency, so we’re ready if, God forbid, disaster strikes. This measure will cement the progress we have made in maintaining New Orleans’ fiscal health that we have built up together and will keep our city’s finances moving in the right direction.
That’s why groups like the Bureau of Governmental Research and the Business Council of New Orleans are supporting this as a best practice for budgeting.
The amendment would require the establishment of a savings fund that could be spent only under certain restrictive and limited conditions and circumstances, including a two-thirds vote of the City Council in a declared emergency, economic downturn or in response to a federal mandate.
The proposed charter amendment to establish the savings fund is a sensible approach to safeguarding recent improvements in the city’s financial position. Setting aside a portion of the general fund balance for fiscal emergencies will help make sure the money is available when the city needs it most.
A fundamental tenet of public finance is that government entities should maintain reserve funds to help cover unexpected costs during emergencies and economic downturns.
New Orleans has had no shortage of such incidents in recent years, including hurricanes, an oil spill and the recent drainage system failures. We have already come so far together, so let’s continue to move this city forward by protecting our financial progress.
Mayor Mitch Landrieu
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