Cantrell releases her 2020 budget proposal, while disagreements over property tax rate continues
21st October 2019 · 0 Comments
By Michael Isaac Stein
The Lens
New Orleans Mayor LaToya Cantrell on Thursday of last week presented a proposed $722 million city general fund budget for next year, an increase of $21 million — or 2.8 percent — above this year’s expected $702 million budget.
Much of the increase will go to public safety, such as the police and fire departments, as well as departments within the Mayor’s administration, such as the Department of Finance and the Chief Administrative Office. The audience of the City Council chamber, which was filled with police officers and firefighters, was representative of the budget’s priorities.
The general fund represents locally generated revenue — like taxes and fees — over which the city has direct control. Cantrell’s overall budget, including earmarked state and federal grants, as well as other dedicated revenue, is $1.13 billion.
The City Council will still have to vote to approve the budget before it’s finalized. That has to happen before Dec. 1. The council will hold 10 days of full day hearings, during which departments and government agencies will have the chance to plead their case if they disagree with Cantrell’s allotment. The first week will start on Oct. 28 and end on Nov. 1. The second week will go from Nov. 11 to Nov. 15.
The council will then have the chance to tinker with Cantrell’s recommendations before voting on a final version.
In the Mayor’s proposal, the New Orleans Police Department would see a $2 million bump, mainly for new personnel in the analytics and recruitment units. The Office of Police Secondary Employment would also get a $1.5 million general fund increase. That office helps NOPD officers find secondary work outside of the police department, including business security and event details.
The Fire Department would also get a $2 million increase, while the Office of Homeland Security would get a $1.2 million increase. Other major increases include $1.3 million to the Health Department, with most of the boost going to EMS, and $1.2 million to the Office of Homeland Security and Emergency Preparedness, which operates the citywide surveillance camera system.
“Public safety is public health,” Cantrell said.
The Juvenile Justice Intervention Center, which houses detained youth, would see a nearly $850,000 bump. But according to a presentation by Chief Administrative Officer Gilbert Montaño, that number could be higher. He said that the city might need to spend another $3 million to $3.5 million to expand the center.
That expansion has been in the works for years, as the center has dealt with consistent overcrowding issues. The city broke ground last year, but it’s unclear when it will be finished or what is causing the delays. Last month, the Mayor held a job fair to find people to staff the expanded juvenile detention center.
That is one of a few budgeting unknowns that Montaño brought up in his presentation on Thursday. Another unknown is whether the city will have to fork over $3 million to $6 million to the Sheriff’s Office for “operations and medical services.”
Then there is the question of the recent collapse of the half-built Hard Rock Hotel last Saturday, which left three workers dead. Dealing with ongoing cleanup, street closures and another possible collapse, Montaño said he hadn’t yet figured out how much the crisis will cost the city.
Continued fight over the roll forward
Discussion continued on Thursday about whether to lower the property tax rate to ease the burden of skyrocketing property tax assessments seen across the city this year.
The Cantrell administration had argued that the city should keep the rate steady to raise more revenue for the city’s general fund. The City Council has been skeptical, saying that it should be lowered to help keep long time, older and low-income residents in their homes, and to avoid the new costs being passed down to ratepayers.
When property values are adjusted every four years, the state constitution requires the council “roll back” the property tax rate — reduce the tax rate to a level that will not increase revenues as a result of higher property values. But following that vote, the council has the option to “roll forward” the rates — increase the tax rate back to what it was before the roll-back, meaning higher taxes and more revenue for the city.
Last month, the administration formally asked the council to roll forward, warning of dire consequences if they did not, possibly including mass layoffs or across-the-board budget cuts. Rolling back the rates, Montaño said, would lead to a $20 million to $25 million budget hole for 2020.
Council members were skeptical at the time, calling the presentation a “scare tactic.” And in retrospect, the warnings appear to have been exaggerated.
Last week, the Cantrell administration offered a compromise. The mayor is now asking for a partial, 50 percent roll forward, which would put the property tax rate squarely between the rolled forward and rolled back rates. According to numbers provided by City Economist Deborah Vivien, the partial roll forward would only provide roughly $7.5 million in new property tax revenue. Including taxes from new construction, the city expects property taxes to increase by $14 to $16 million next year.
Because of a constitutional amendment voters passed last year that will phase in some property tax increases, actual collections may be lower than the city’s projections.
The city previously estimated that a full roll forward would lead to more than $20 million in new property tax revenue. It appears that original $20 million figure cited by the administration included not just increased property taxes on existing properties but estimates on revenue from new construction.
Cantrell on Thursday pushed back against the council’s skepticism of a roll forward, calling out what she perceived as hypocrisy.
“I’ve been told I’m making idle threats,” she said. “I don’t do that.”
She brought up the fact that earlier this year, the council voted unanimously to put forward a ballot to create a new property tax, or millage, for the Council on Aging. Cantrell said that tax increase would have cost homeowners a similar amount to the roll forward.
That millage, which Cantrell opposed and which was ultimately rejected by voters, would have added two mills to residents’ property taxes. Following the required roll back, the partial roll forward would add 1.65 mills while a full roll forward would add 3.29.
“The budget is not a political football,” Cantrell said.
After the meeting, Montaño doubled down the administration’s outlook, giving ominous warnings about what would happen without the partial roll-forward.
“Unequivocally there will be cuts,” he said. “I don’t have enough available fund balance to cover what a non-partial roll forward would provide. It just doesn’t exist.”
The above article originally appeared in The Lens on its website (www.thelensnola.org). The Louisiana Weekly enjoys a partnership with The Lens.
This article originally published in the October 21, 2019 print edition of The Louisiana Weekly newspaper.
