City Hall revenues grow, but mayor warns of looming liabilities - KSLA News 12 Shreveport, Louisiana News Weather & Sports

City Hall revenues grow, but mayor warns of looming liabilities

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NEW ORLEANS, LA (WVUE) -

City government revenues are growing, but they're nowhere close to meeting the growing demands on the city's bank account.

"Our revenue is growing at a higher rate by many variables than the state of Louisiana, and I believe the nation as a whole," said Mayor Mitch Landrieu during a meeting Wednesday of the Revenue Estimating Conference at City Hall.

Sales taxes were a big driver last year, rising by 9.6 percent, according to the city's chief economist, James Husserl. Husserl said revenues were $19.7 million higher than projected for the year.

But the mayor said looming financial liabilities far surpass the gains. The U.S. Supreme Court recently added to the city's financial angst by refusing to block lower court rulings that said city government owes at least $17.5 million in back payments to the firefighters pension fund.

Landrieu said he will not decimate the city's budget to pay the judgment. He said legal judgments alone account for a $40 million gap in the budget, and when additional city needs such as streetlights and library funds are factored in, the gap grows to $100 million.

"We're going to really consider our options. I'm not really going to lay-off people to pay that particular judgment. We'll put it in line with all of the other judgments that are confronting the city, and there are lots of them," he said.

The city could seek a full appeal of the judgment before the Supreme Court, but some in the legal community said getting the high court to hear the case may be a long shot.

The head of the firefighters union said the money must be paid because firefighters have waited too long for what they rightfully deserve.

"There's no more avoiding and using delay tactics any longer," said Nick Felton, president of the New Orleans Fire Fighters Association. "The Supreme Court has denied their stay. It's over." 

He said the city is once again dragging its feet on an issue that should have been resolved some time ago.

"It is cannibalizing a pension fund that is on life support, because since 2009 they haven't made their payments. It's like if you hadn't paid your house note since 2009," Felton said.

Landrieu left before the meeting was over and headed to the State Capitol, where the Louisiana Legislature is in session. Landrieu has a package of bills that would give the city more options to generate funds, including a proposed increase in the city's hotel motel tax and a hike in the property tax dedicated to police and fire services. But the legislation is meeting stiff opposition.

"I'm very disappointed," Landrieu said. "I mean, the Legislature either has to honor its obligation to give the City of New Orleans the money we're owed - like the casino support services contract that ought to be in the range of $10 million dollars, and we have to fight every year for $3.5 - or the worst-case scenario, they have to give us the authority to decide whether we want to raise revenues on our own."

Given what is happening in the courts and what's not happening in the Legislature, Landrieu said he will have a frank conversation with New Orleans residents about city services priorities and the direction the city should move as it faces mounting financial challenges.

"So what I'm going to try to do in the next couple of months is lay this out really, really clearly to the public, and then we, the people, are going to have to decide, you know, what pathway they want me and the council to take," he said.

Felton said his association is willing to work with city government to find ways to get the legal judgment paid, but he said the city must be serious about meeting the obligation.

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