NEW ORLEANS —
Plummeting sales tax collections are wreaking havoc with the city’s $726 million 2020 budget, leading to a hole that could be as much as $170 million.
Now, the Cantrell administration is hoping to borrow up to $100 million to help plug that hole.
On Tuesday, Chief Administrative Officer Gilbert Montano laid out the idea before the City Council’s Budget Committee, saying that the city is looking for every penny it can right now to avoid furloughs, layoffs and cuts to services.
But he said the need to borrow money is great since the city is losing as much as $22 million a month as many restaurants and businesses in the city remain closed.
Norman White, the city’s chief financial officer, said that if the line of credit get the OK, the goal is to have the repayments spread out over enough time so that taxpayers aren’t paying more than they can bear.
The city has already cut some services, such as nighttime garbage collection in the French Quarter, to save money.
And a hiring freeze for non-emergency positions has been enacted. Montano said that’s already resulted in a surplus of $16.7 million.
But the council is uneasy about the line of credit. Budget Committee Chairman Jared Brossett asked Montano why the city does not want to use a fund balance of $100 million it already has.
“That $100 million is really not $100 million because so much of it is obligated,” he said, noting that it is already set to be spent on certain things. “The unassigned is around $20 (million) to $22 million.”
While there are fewer sales tax dollars coming in, the city said there is one bright spot.
Nearly 96 percent of property taxes have been paid. That revenue source brings in about $167 million.
More Stories:
► Get breaking news from your neighborhood delivered directly to you by downloading the new FREE WWL-TV News app now in the IOS App Store or Google Play.
