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New Orleans passes $1.5B budget, boosts spending on police recruitment

Council members nixed only one major request: a $12 million proposal to cover the cost of officers’ health insurance

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Photo/New Orleans PD

By Matt Sledge
The Times-Picayune | The New Orleans Advocate

NEW ORLEANS — The New Orleans City Council and Mayor LaToya Cantrell spent a year tussling over crime, the management of snarled road work projects and other contentious issues. But when it came to the city’s $1.5 billion budget, they lined up with ease behind a plan aimed at tackling the persistent problems of blight, police recruitment and city infrastructure.

In a series of rapid-fire votes, the council on Thursday unanimously approved the lion’s share of Cantrell’s spending plan for 2023. Both sides also agreed to a number of initiatives paid for using a massive injection of one-time money, carved from federal pandemic aid and a surplus from unfilled city positions.

Council members, who have the final say on city spending, nixed only one major Cantrell request: a $12 million proposal to cover the cost of first responders’ health insurance. That money was re-routed to several other projects.

In addition to the underlying budget proposal, the council passed a mammoth $262 million amendment. The projects funded by that haul of one-time funding include $100 million more for the city’s rainy-day fund, a $30 million criminal justice IT overhaul, $22.5 million in police recruitment and retention payments, $15 million for a Sewerage and Water Board substation, $10 million for blight remediation and $4.9 million for a juvenile probation and parole program.

District A Council member Joe Giarrusso said the budget was aimed at makign a dent in the issues that have repeatedly come up in public forums, like youth services, public safety, road work, fixing potholes and economic development.

“What are the most pressing and vocal concerns for residents? Answer, good and timely services,” said Giarrusso.

[EARLIER: New Orleans officials struggle with funding strategy to retain, recruit officers]

Friendly, with a catch

Council members and the city’s chief administrative officer, Gilbert Montaño, described the budget negotiations as friendly despite the tensions that defined the mayor-council relationship this year.

The budget ordinances passed 6-0 with Council Vice President JP Morrell absent. An aide said Morrell had briefly ducked behind the dais and would have voted for the final product.

One reason for the smooth final passage, according to Giarrusso, was that elected officials and residents have already aired their frustrations about city services like blight remediation and road work projects many times this year.

The one major point of disagreement between the council and the administration was Cantrell’s proposal to make health insurance free for police officers and other first responders. That proposal was aimed at hiring new cops and convincing current officers to stick around.

Giarrusso, the budget chair, said the council was concerned about the recurring cost of the health insurance plan, which the administration had only funded for three years. The cost of the health insurance plan will instead be directed towards a $2 million cost-of-living adjustment for city retirees and other council priorities.

Moving money

Montaño said the “huge” budget was the “most complex” he had helped craft in his career. Much of that complexity was driven by the interplay between the city’s traditional revenue streams, like sales and hotel taxes, and a big pot of one-time funds. Montaño has previously estimated the number of one-time funds at more than $400 million.

Only a couple years ago, as the pandemic hammered the city’s tax revenues, Montaño was sounding the alarm about the future. The budget passed Thursday instead represented an optimistic take on the future.

“In so many ways, our city has been battered by historic and new challenges — but today, I’m proud to say this Council, in concert with the administration, is presenting an opportunity for new beginnings,” said Helena Moreno, the council president.

The city’s reserve fund was the biggest recipient of that money, gaining $100 million that can be used to pay upfront costs in emergencies or during economic downturns.

Even though the city was flush with cash, some agencies didn’t get all they requested. Orleans Parish Sheriff Susan Hutson had asked for $13 million more for her agency, in part to provide higher wages for deputies and thus fill scores of vacant positions at the jail.

Instead, the council kept the agency’s funding level with the mayor’s proposal. The administration has said that will be enough to give deputies a $2.43 per hour pay raise, given the number of vacancies at the lock-up.

Meanwhile, District Attorney Jason Williams had asked for an additional $2.4 million in city funding. He didn’t get that funding directly in the budget, but Montaño said he would receive the funds if he shows at quarterly check-ins that he has hired more employees.

[EARLIER: $80M plan announced to help bolster depleted New Orleans PD]

More to come

One of the largest single recipients of additional funds compared to last year’s spending was the NOPD, which has been beset by criticism over the city’s crime spike and has struggled to keep police on the force. The council dedicated $37.5 million to that agency in the omnibus budget amendment, plus millions more toward other criminal justice projects.

While the administration secured $7 million for a new $10,000 retention payment for police officers after three years, and $12 million for a $20,000 recruitment incentive for new hires and lateral transfers, that money came with a catch.

Giarrusso said the $7 million for extra retention payments had been placed in “escrow” pending further council study of whether an earlier, previously approved round of $13.5 million in retention incentives was working.

To ensure that the administration shows whether the police incentives work, the council passed a separate motion that directs the Mayor’s Office to report back in June on the strength of its officer and recruit corps.

Moreno said that a survey that her office conducted with the Fraternal Order of Police suggested that workplace conditions loom larger than pay.

If there was one running theme in the public comments, however, it was that the city was spending too much money on police.

“We’re spending so much money on the police and putting money into the police, but you guys are not looking at the systemic problems,” said Simone Haley. “Y’all do a lot of mouth service and a lot of talking, but there is nothing done to help the youth, and the youth in New Orleans are Black and brown people.”

Echoing calls made during the 2020 protests over the murder of George Floyd, community organizations like the New Orleans Workers’ Center for Racial Justice had asked the council to spend more on housing, social services and support for low-income residents.

District D Council member Eugene Green defended the council’s spending plan, noting that it had doubled the proposed appropriation for the New Orleans Recreation Development Commission by adding $1.5 million for the agency.

Meanwhile, Morrell described the budget as “a first step in a process,” because there were many more one-time funds yet to be appropriated.

“This council is responsive, and we have heard you on many of the priorities you have put before us,” he said.

Giarrusso said there were about $70 million in federal relief funds remaining and at least as many, if not more, city fund balances left to spend.

The city and council will reconvene to discuss how to spend those remaining funds next year, said Giarrusso.

NEXT: New Orleans officers, leaving in droves, air grievances in exit interviews


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