How does New Orleans City Council prioritize its budget?
Joe Giarrusso III, who represents District A, and Jason Williams, elected by the city at large, discussed the city’s budgeting process and priorities with residents of the Carrollton Area Network. Both councilmembers used the Tuesday evening meeting to present their ideas for improvements or new allocations, with opportunities for public input.
Roughly half of the city’s $646 million general funds are spent on public safety and government, according to the city’s 2018 adopted budget. Roughly five percent goes toward public works – around $33 million – and just over $37 million put toward sanitation. Police and fire combined are allotted just over $263 million.
Every 24 cents on the dollar is dedicated to public safety; the same amount is allocated to public education. Eight cents go toward sewerage and water, but not drainage, and seven cents go toward public transportation. Three cents for every dollar are dedicated to street and traffic signals, which translates to roughly $5 million, Giarrusso said.
The city collected $144 million in property taxes in 2018, and nearly $215 in sales tax. To protect the most vulnerable, Giarrusso said those numbers should be reversed.
“I would argue sales tax that high is too aggressive, particularly for people who don’t have much money,” he said.
Licensing fees, fines and forfeits, service charges and miscellaneous revenue make up the rest of the $646 million general funds. Another $465 million is generated through special revenues, urban and hosing development, grants, and the Wisner Fund.
Traffic cameras generate $29 million for the city, but Giarrusso recognized the polarizing effect those speed cameras have on New Orleans residents. Several neighbors cited the financial burden associated with multiple tickets – which can cost more than $100 – and their impact on low-income residents. Cutting out the cameras is an option, Giarrusso said, but reducing fines to make them more similar to parking tickets could help reduce that burden.
A lack of affordable housing – and an ever-increasing property tax – is pushing working-class families out of the city. And those who do pay property taxes pay an inordinate amount due to tax-exempt properties scattered throughout the city, the councilmembers said. Many nonprofits rely on property tax exemption for their business, but the larger nonprofits have valuable, money-making assets that don’t bring in any money for the city. Councilmember Jason Williams suggested a property tax analysis of nonprofits, which would determine what those nonprofits would pay if they were a private citizen or company. An analysis would most likely result in a “special assessment.”
“These nonprofits rely on our streets, rely on our fire department, rely on city resources, but aren’t paying anything,” Williams said.
Giarrusso added the city should be more focused on fees, rather than taxes, since “everybody can pay a fee.”
On top of traditional city taxes, some neighborhoods have opted into paying extra mills for a security patrol. CAN resident Tim Garrett questioned if the council is looking into the $6 million spent on 35 special security districts across the city. The city has hired Jeff Asher, former CIA analyst, to pore over crime data to determine if the security districts are getting results, Williams said. Though the New Orleans Police Department should already be able to handle public safety without augmentation from the city’s residents, Williams added.
As usual, short term rentals dominated much of the neighborhood discussion. Several residents rallied for a “more fair” STR process for local owners, especially those who have lived in their neighborhoods for decades. The Orleans Parish Assessor Erroll Williams, in partnership with the Louisiana Tax Commission, is developing new rules classifying homes rented to tourists through sites like Airbnb as commercial properties. The proposed plan could see taxes on some short-term rentals jump by nearly 50 percent, according to a report from The New Orleans Advocate.
Williams also proposed converting vacant properties along the once-grand Canal Street into short term rental units, which would draw more retailers to the aging spot. As it stands now, much of historic Canal Street is a fire hazard; old wooden buildings butting up next to each other can quickly spread the fire from barrel fires. The council has tried for years to lure retailers to Canal Street to no avail, Williams said, so many New Orleans residents spend money in Jefferson Parish or Houston.
Canal Place is proof New Orleans residents have money to spend, Williams said.
But taxing STRs as commercial will hurt small operators who are just seeking to supplement their income, residents argued. The council is attempting to juggle the value of neighborhoods against the benefits of local owners.
“We’re losing the opportunity to be able to afford a home, because we can’t compete with the people who want to flip it and use it for a fest. We have to do something to protect these neighborhoods, Williams said.
For those who want a better understanding of how each year;s budget is created, the Committee for a Better New Orleans has developed a virtual game where “players” (the public) create a balanced budget while funding the many important responsibilities of city government. The Big Easy Budget Game started in 2015 with buckets full of physical red beans, but moved virtual in 2016. Since then, thousands of residents have earned a greater understanding of million-dollar budgeting.
To play, visit the Big Easy Budget Game’s website and create your own city budget.