Tulane Economic Professor talks New Orleans $160M budget deficit

NEW ORLEANS (WGNO) — A $160 million spending deficit is weighing heavily on the minds of city leaders, as uncertainty over the city’s budget crisis continues.

According to the legislative auditor, overtime spending is one of the biggest contributors to the deficit. Overtime came close to fifty million dollars during this year alone.

Tulane Economics Professor Rosalind Cook says while the city and its council members will have to make this work, the last thing residents want to see is a rise in taxes.

“Citizens are going to be somewhat apprehensive because, to plug in, you would have to raise fees. With the population decreasing, we have to take this seriously,” said Professor Cook.

Councilman Joe Giarrusso says the deficit is more than expected, but it is something they have to deal with.

Even with cuts more than likely to happen, he believes they can make it work.

“Some things that the administration is cutting right now that will save some money. There are things that we’re going to move from operating expenses to capital expenses. Administration hasn’t spent money on certain things that will save money. I would feel a lot more comfortable, maybe 70 or 80, and then have to decide how much the fund balances from that, ” Giarrusso said.

With only $8 million left in the city’s fund balance, Mayor-Elect Helena Moreno is looking at all options. She says there’s no time for any other type of inefficiencies.

She also asked the legislative auditor for any avenues she could take.

“If he could provide someone who could not be a part of my budget transition team, but could help provide solutions,” Moreno said.

Even with the new administration beginning under a $160 million deficit, Cook believes it won’t be a long-term problem for Moreno based on the mayor-elect’s experience.

“This is a good thing for the people of New Orleans that we do have someone. No, she’s not in the field of finance. But she has certainly been around for 20 years. She’s going to try to stay as positive as possible,” Cook said.

The next budget hearing is set for Monday. The first expected to speak at that hearing is the Mayor’s Office.

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