(Official Times-Picayune editorial, April 15)
As New Orleans officials grapple with an April 17 meeting where they literally will argue about whether or not the city faces a budget crisis, they should welcome some new recommendations from the Bureau of Governmental Research, even if they quibble with BGR’s criticisms of their past performance.
Released this month, BGR’s “After the Windfall: Strengthening the City of New Orleans’ Financial Management Practices” is full of good advice. Three points stand out:
- The city should make a habit of keeping reserve funds equal to more than two months’ worth of regularly budgeted expenses. Especially in a city as prone to natural disasters as New Orleans is, a significant emergency fund is essential.
- There should be a clear policy for when and how city reserves can be accessed, preferably with some sort of higher hurdle — a supermajority City Council vote, perhaps, or some other safeguard against too easily tapping the reserve.
- The city should strive mightily to avoid spending one-time revenues on annual, recurring expenses. If it does spend one-time revenues that way, it should be transparent and explain how it will meet those costs in future years.
BGR makes other good recommendations. To wit: The mayor and council should do multi-year financial planning, not just year by year. The city should be more transparent about, and improve the accuracy of, its revenue and spending projections. And if the council adds “discretionary” items to the mayor’s budget, it should do so with far more transparency and specificity, with better lead times whenever possible, and with at least an attempt to find concomitant cuts from the mayor’s proposal.
Discretionary alterations shouldn’t be just a one-way ratchet for more spending. Even if the council can’t produce dollar-for-dollar savings for each added spending item, the very exercise of trying to reach that goal will help ward off future budget crises.
For illustrative purposes more than to make too big a deal of those City Council add-ons, consider this: BGR notes that for 2025 the council added 45 projects costing a total of $62.3 million, some of which — such as various summer jobs and youth programs, funding the Algiers ferry and ongoing criminal justice diversion programs — look like recurring rather than one-time expenses.
Suffice it to say that the explanatory notes for some of those items certainly don’t seem to justify, just as pure arithmetic, the dollar figures listed — and that, when asked, several council members can’t really say how they arrived at the specific dollar figures.
Even if the spending choices are wise, the transparency and specificity seem lacking.
That’s BGR’s larger point: “The process for reviewing the city’s budget and finances is not as robust as it should be,” said Rebecca Mowbray, BGR’s president and CEO. Moreover: “In the big picture, long-term, the current numbers aren’t sustainable.”
BGR is right that the mayor and council should adopt these common-sense practices to help their successors avoid fiscal ruin.
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[Note: That, above, is the whole editorial.]
