This afternoon at City Hall, New Orleans Mayor Mitch Landrieu announced plans to plug the city's $67 million budget hole for the year a plan that includes 11 unpaid furlough days for all city workers by the end of the year, and a 10 percent pay cut for Landrieu and members of his staff.
Landrieu was joined by members of the City Council and his administration in announcing the cuts at City Hall this afternoon.
"This is not a proud moment for the city of New Orleans, and I am particularly angry as a citizen and as now the chief executive officer of this city that now we find ourselves in a situation to make very bad choices based on bad options," said Landrieu, adding that he had "no choice but to make very very difficult decisions today that will be painful."
"The city of New Orleans has been living beyond her means, and the city has not even made good on delivering the services that it was budgeted to deliver," the mayor continued.
Landrieu compared the cuts to those being made by other mayors around the country the city of Oakland had to lay off 60 police officers this week, and Mayor Cory Booker in Newark, N.J. has closed swimming pools, stopped buying toilet paper, and stopped putting gas in city cars, said Landrieu. "Those are fairly significant austerity measures, so we are not living in isolation," Landrieu added. "We are living in tough times, and we are living in tough times because other folks made bad decisions and we have to correct all of those things."
The city is currently overspending its existing budget by $32 million and will cut back on overtime, and rely on reductions in the police department's command structure announced earlier this month to fill that gap. The 11 days of furlough will save the city an estimated $6.7 million, while reductions in other contracts will save $5.6 million over the next 12 months.
The city is also using $23 million from an insurance settlement, which was due to be paid before Landrieu arrived as mayor, and which has since been paid. That money will go against the city's structural obligations and one-time losses for 2010. The mayor's office said the insurance settlement was related to Hurricane Katrina, but did not go into specifics this afternoon.
By the end of the year, the $67.5 million gap will be filled with $67.5 million in cost savings, if the mayor's plan is fulfilled. Video: