By Jeff Adelson And Jessica Williams
The Times-Picayune | The New Orleans Advocate
NEW ORLEANS — New Orleans’ city workers will see their pay cut by 10% through the end of the year under furloughs unveiled by Mayor LaToya Cantrell and her top aides on Monday, part of a budget-cutting plan aimed at addressing the financial impact of the coronavirus and the shutdowns designed to slow its spread.
The temporary furloughs for 4,700 employees include police, fire and other public safety workers. And the administration warned they may only be a prelude to additional cuts next year that could include layoffs, more unpaid time for city workers or pushing employees toward early retirement.
The proposal, announced by Cantrell and Chief Administrative Officer Gilbert Montaño during a City Hall press conference, would require all city workers, including Cantrell, to take an unpaid day off once each 14-day pay period.
Cantrell also encouraged similar furloughs for the City Council and outside agencies beyond the control of New Orleans’ administration that are funded through the city’s budget.
“The reality is we are in a fiscal crisis here in the city of New Orleans,” Cantrell said during the Monday afternoon press conference. “The pandemic has affected the city’s entire workforce. City Hall is not immune.”
The furloughs come as New Orleans is grappling with what city finance officials expect to be $150 million less in revenue this year amid plunging sales tax receipts. The drop represents roughly a quarter of the city’s $627 million budget.
Cantrell warned in the spring that such a shortfall could lead to furloughs or layoffs if things didn’t turn around.
But with the coronavirus pandemic stretching into its seventh month in Louisiana, there has been little reprieve for New Orleans’ economy. City and state rules aimed at slowing the virus’ spread have shuttered bars and restaurants, reliable sources of sales taxes. And the larger freefall the tourism industry faces as people across the country have decided against — or been unable to afford — travel has cut into the taxes paid on hotel rooms.
Until now, the city has largely been able to stave off any cuts to existing employees by focusing on trimming contracts, leaving positions unfilled, putting limits on overtime and using one-time money to plug budget holes, Montaño said. But those efforts have still left the city $41 million in the hole as the end of the year approaches, he said.
While the administration recently received approval to take out a $50 million line of credit, Chief Financial Officer Norman White said the city was attempting to avoid using that money this year in case it runs into cash flow problems in 2021.
“This is another tough decision that we are making financially, and it may not be the last,” Cantrell said.
The furloughs would take effect in the next pay period — which starts Oct. 10 — if the Civil Service Commission approves. Typically, such a proposal would require 30-days notice but Cantrell called on that commission to fast-track her plan in a written request on Monday.
For the city’s nearly 4,040 rank-and-file workers, who are known under Civil Service rules as “classified employees,” the cut will mean they will have to take one unpaid day off during every two-week pay period from Oct. 10 through the end of the year.
The 670 “unclassified employees,” a category that include department heads and political appointees, will also see a pay cut. But Cantrell made clear she expects those workers to continue to show up every day.
“It will be that or not having a job at all,” Cantrell said.
Officials are already gearing up for potentially more extreme measures in the coming year. Departments have been instructed to reduce their budgets by 20% and, in her letter to the Civil Service Commission, Cantrell warned that she would likely be returning to them in the near future to ask for further cuts.
“We will only be able to reduce personnel expenditures enough to fill this funding gap through some combination of furloughs, pay reductions and/or layoffs,” Cantrell wrote.
The furloughs this year are expected to save the city about $6 million, a relatively tiny fraction of the overall budget. However, that’s roughly the same amount that the city spent in unexpected costs as it geared up for near-misses from multiple storms that appeared to be heading toward New Orleans over the course of this year’s exceptionally active hurricane season, Montaño said.
While New Orleans has not had to deal with a direct strike from a hurricane this year, Cantrell said “these expenditures are real. We have yet to get reimbursed for those expenditures to give you a sense of what we’re dealing with.”
City public safety unions warned that the furloughs would endanger residents and said they urged the administration to reconsider including their departments in the proposal.
Aaron Mischler, head of the firefighters union, said the New Orleans Fire Department has already been having difficulties staffing firehouses and warned that reducing the number of people on duty could leave “large swathes of the city without immediate protection.”
“We’re called essential workers for a reason,” Mischler said. “We can’t be called essential one week and then be treated like we’re expendable the next.”
Police Association of New Orleans attorney Eric Hessler said the furloughs would add to cuts officers are already reeling from restrictions on overtime and a loss of revenue from off-duty details. He noted the announcement comes at a time that homicides and shootings are on an uptick in the city.
“This is going to be a burden on morale and a lot of police officers who are looking to leave the job and go other places, this might be another factor in making their final determination,” Hessler said. “I think it needs to be rethought for everybody’s sake.”
©2020 The Times-Picayune | The New Orleans Advocate