00:00Behind all the glitz and glamour of Mardi Gras, there is some financial issues that are going on
00:04right now. Like you mentioned, $222 million deficit. And, you know, as I did my reporting
00:09and talked to a lot of city officials, a lot of them have the previous mayor's administration to
00:13blame for this. So we have a new mayor that came into office in January and she took on this
00:18deficit. And a lot of it, you know, dates back to the COVID era money that all the states and
00:23cities received at the time, you know, New Orleans received hundreds of thousands of dollars. And
00:29what they did with that money is they used it for increasing city government staff, recurring
00:34expenses, adding programs, and really propped up their day-to-day budget with the COVID funding,
00:41which now, you know, we're seeing a couple years down the line after the pandemic, we're really
00:46seeing that play out for different states and cities. And New Orleans is at the middle of that
00:50right now. So what's the proposed solution? So what they're doing right now is basically
00:56everything's on the table. I chatted with the budget chair and she was saying that new tourism
01:00taxes could be on the table. So you just mentioned, you know, there's already lots of tourism taxes in
01:05place, but currently they don't make any taxes off of the concessions at the Caesar Superdome, which is
01:10where the saints play. So that's on the table, new alcohol taxes, hotel stays. So that's an option
01:17right now. And then also what the city started on Sunday actually was that they're doing furloughs
01:23for city council or city employees. And so if you make a certain amount of money and above,
01:29you could be subject to up to 22 days of furlough days. So, and that's for the whole year. And
01:35it's
01:36basically on a scale based on how much revenue or how much money you make each year, but that's 22
01:41unpaid days for a city council employee potentially. So that that's on the cost cutting
01:47side here. Wow. It's amazing. So are there municipal bonds outstanding for the city of New Orleans?
01:53You know, I don't know that, but I know that they do have lots of other, you know, budget gaps
01:59to
01:59cover. They spent a lot of money over the past couple of years and they have to reel that in
02:04by
02:04cutting, you know, they've cut, you know, city council employees, cutting programs. And that's a big
02:10concern for New Orleans right now because they have to do these cost cutting measures. But before
02:15the state steps in, they're worried that, you know, if, if it does ever come to that, the state could
02:20cut programs, could cut employees, programs that are important to the community, because at the end
02:24of the day, New Orleans is a blue city and a red state. Blue city and a red state. Okay.
02:30So what is the
02:31state saying? Because, you know, just here in New York City, we, we know, and people come to understand
02:36when they move here that the state of New York has a big impact on the finance, on how the
02:40city
02:41operates. The mayor has to deal with that. What is the state of Louisiana said about what they want
02:46to do with New Orleans? Well, so New Orleans went to the state and issued a $125 million payroll loan
02:53at the end of last year. And that was to cover outstanding expenses, cover payroll costs. And so
02:59that loan is going on right now and it's supposed to be repaid in May. But I spoke with the
03:03budget
03:03auditor, um, or the state auditor for Louisiana. And he said that he's expecting New Orleans to
03:09have to issue another loan in the future. Um, and they could continue doing this until they
03:15fix the budget problem. So is there anything structural here that like a solution wise,
03:20is there any kind of like doomsday? We have to, I don't know, cut our budget in half or something
03:26like that. I mean, is there anybody talking about that, but that would presumably require
03:30incredible political capabilities. Yeah. I think the front, the front thing right now
03:35is using this payroll loan to really relint expenses, cover costs. Um, they did have to
03:40use a portion of this loan to cover police retention bonuses. The previous mayor's administration had
03:45promised retention bonuses to police officers for three years in New Orleans because there was a
03:50retention problem. And this year is the third and final year of those bonuses. And about two weeks
03:55before the new mayor took office, they learned that there is not enough money left for those bonuses.
03:59So they had to use a portion of this loan for the retention bonuses, which was not anticipated
04:04when they first took this loan out. So they're going to have to figure out a way to curb other
04:09costs or, um, you know, like I said, they're going to have to take out another loan in the future.
04:13Over, I'm reading your reporting here, overspending on overtime further deep in the crisis.
04:17The auditor found the city budgeted $57,500 last year for overtime, presuming police,
04:23but ultimately spent an estimated $50 million, more than half on police. That's an oops.
04:29Yes. I mean, it seems like you need some smarter people in there who can balance the budget a little
04:35bit. Costs definitely increased after the terrorist attack that happened, um, in January of last year
04:40on Bourbon Street. But you're right, you know, they accounted for, you know, $57,500 and to have
04:47a $50 million overspend budget that definitely contributed to the overruns.
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