Audit reveals $160 million deficit in New Orleans budget

NEW ORLEANS (WGNO) — Budget hearings continued on Wednesday amid a financial crisis for the city of New Orleans.

According to Louisiana Legislative Auditor Michael Waguespack’s report, the projected deficit for the New Orleans budget is $160 million.

“$47 million on a close to $1 billion of general fund budget is really running tight. In a hurricane-prone area, you probably need to have a little more because, you know, with the restructuring and FEMA and who knows what’ll happen with federal resources,” said Waguespeck.

However, $37 million is restricted and cannot be appropriated, as the other $8 million is to cover expenses.

Waguespeck says the spending deficit began to increase in 2023.

According to the New Orleans finance department, the council was made aware ahead of time that a possible deficit was on the horizon, which council members say is false.

Going forward, Waguespeck recommends that actual reports showing the actual spending amount from the system be done monthly.

“What you’re telling me is that we provide a 100-page report by counsel request that you don’t read,” said Director of Finance-City of New Orleans Romy Samuel.

“Here is the issue. We get the report after the fact. The money’s already been spent by the time we got it. Okay. We can’t stop that from happening. The administration stops that from happening. And in fact, the reason why we had the meeting in January is because we saw what the numbers were. We’re the ones who raised that issue, not y’all,” said Councilman Joe Giarrusso.

“What was supposed to be budgeted and put into the brass system, and just a realistic budget to actual so that you can address this deficit spending,” said Waguespeck.

Though Councilman JP Morrell took it a step further, stating to ensure this doesn’t happen again, it’s best if they made the budget more like a regular legislative process.

“Whenever you want to move money around, whenever you want to deficit spend, there has to be a public hearing saying, where’s the money going to come from? Because right now we’re in a hole and there is no requirement that anyone tell us before the spending happens,” said Morrell.

Another budget hearing is set for Thursday, with more to come. A final budget must be approved by Dec. 1.

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