NEW ORLEANS — The city of New Orleans is in the midst of an unusual budget dilemma. It has more money than it can spend, and officials say that’s a problem.
City revenues were more stable than predicted during the COVID-19 pandemic. On top of that, the city has taken in hundreds of millions of dollars in federal pandemic relief funds. Amid the rare surplus, however, departments remain woefully understaffed, struggling to provide basic services.
“We’ve reversed 180 degrees,” Councilman and budget chair Joe Giarrusso told Verite. “For too long we’ve said money is our problem, we can’t do anything because we don’t have the money. And now the money is there to do a lot of these things. So what is actually being done?”
A report from Mayor LaToya Cantrell’s administration in early March indicates the city is on track to spend just 65% of its already reduced personnel budget for 2023. Some departments are on pace to spend as little as 37% of their budgets for the year. The March report also shows the city’s fund balance — which comes from unspent surpluses — grew to $274 million in late February, up from $238 million in December.
Meanwhile, the city is sitting on a huge pile of federal funds. Mayor LaToya Cantrell’s administration still hasn’t spent the bulk of the $388 million the city received in federal COVID relief aid. The city has only used $600 million out of $1.6 billion in FEMA infrastructure funds from Hurricane Katrina, risking blowing a federal deadline and losing...
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