Friday, November 30, 2012

Council passes $492 million city budget

Posted By on Fri, Nov 30, 2012 at 3:11 PM

New Orleans City Council today easily passed Mayor Mitch Landrieu's $492 million budget, making a few minor adjustments.

The final budget makes reductions in the council's budget by about $100,000, to $9.8 million from $9.9 million. The Orleans Parish Sheriff's Office's budget was reduced by $300,000 to $22.1 million, with that money taken out of the sheriff's electronic monitoring program.

Council members voted to add about $1.1 million to the New Orleans Police Department's budget, bringing its total general fund allocation to $126.7 million. The additional funding will be used to pay for two new recruit classes next year. Finally, the approved budget restores grant funding for the LSU AgCenter and increases a grant to the New Orleans Council on Aging by $100,000.

(More after the jump)

Council members overwhelmingly rejected Councilwoman at-Large Stacy Head's amendment that would have reduced general property tax millage rate from 13.91 mills — the 2012 rate — to 11.67 mills. Current rates are anticipated to bring in $9 million in higher property tax revenue revenue next year, due to a higher revaluation of some city properties by assessor Errol Williams. Head's amendment would have cut the increase to about $2.8 million.

Head said that the city, reduced in population by more than 20 percent since 2005, is nevertheless paying 35 percent higher property taxes.

“I do not believe a smaller group of people should have a higher property tax burden,” she said.

Head also appeared to object to the city receiving a "windfall" as a result of an off-year revaluation by assessor Errol Williams. As this August article in the Times-Picayune explains better than I'm able to, when property values go up during quadrennial property assessment years, City Council is required to "roll back" tax rates so as to remain revenue neutral. It may then vote to roll the rates forward, that is, maintain existing tax rates, leading to higher revenues.

This all happened during 2012 budget talks — a quadrennial assessment year — when Council voted to maintain the 13.91 mill rate. Since 2013 is an off-year, a roll-back vote wasn't required, so maintaining the rate and the $9 million is not actually a "roll forward."

The budget — which already cuts most city departments, with average departmental cuts of about 10 percent — counted on the additional $9 million, so the reduction would have resulted in a $6 million hole. Since the council is legally required to pass a balanced budget by Dec. 1, city officials would have had to resolve that with even deeper cuts by the end of today.

“At the eleventh hour it seems very difficult to do something about this," said District E Councilman Ernest Charbonnet.

The amendment failed in a 6 to 1 vote.

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