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Full—Contact Budgeting

Nagin held citizens and the recovery hostage to get his way, and that will be part of his meager legacy


Those who govern must constantly set — and reset — budget priorities, and that task becomes increasingly difficult as revenues continue to fall. New Orleans Mayor Ray Nagin and the City Council keep having to learn that lesson. In addition to the tall order of trying to stretch the city's scarce resources this year, the mayor and council have found it almost impossible even to agree on how much — or how little — the city could spend. Such challenges call for equal measures of discipline and diplomacy, but both were in short supply as the mayor and council members negotiated a fragile budget resolution last week. How that resolution came about is a cautionary tale.

  Nagin submitted a proposed $462 million budget for 2010, but council members felt that figure was too optimistic. They instead passed a $455 million budget, noting that the anticipated $68 million shortfall from 2009 could actually be closer to $100 million. Why? Because the city in 2009 spent $25 million in reserve funds and the last $10 million in post-Katrina community disaster loans — all of which was one-time money. Sensing no room for error, the council passed a more austere budget than the mayor proposed.

  Mayors and councils often disagree about budgets, but the City Charter clearly gives the mayor the upper hand in resolving such disputes. For example, the council can only make lump-sum appropriations to city departments; it cannot make cuts on a line-item basis. Only the mayor can do that. The council's reductions thus included $10.5 million from the Chief Administrative Office and $1 million from the Law Department. While he could have vetoed the budget and faced a possible override, the mayor instead threatened to cut back vital services in ways that council members could not abide. Such full-contact budgeting did not sit well with council members and many citizens, but it's perfectly legal under the City Charter. The mayor's doomsday fiscal plan included cutting many city services to four days a week, reducing post-parade clean-ups during Mardi Gras season, not performing expensive repairs on city vehicles (including cop cars), canceling reviewing stands for Carnival parades, eliminating badly needed hearings for blight reduction and code enforcement, and gutting funds for the local criminal justice system.

  The latter two cuts were particularly onerous and would hit citizens where it hurt the most: recovery and public safety. According to the Greater New Orleans Data Center, 54,000 New Orleans addresses are either uninhabitable or empty lots — the highest concentration of blight in the country. Amazingly, those numbers actually represent an improvement over 2008. Through last October, three law firms hired by the city conducted more than 11,000 blight hearings on housing code enforcement. Only $80,000 was budgeted to continue the hearings in 2010, and the hearings generate city revenue in the form of fees and fines. It would therefore seem logical to continue the hearings. But logic has little to do with some of Nagin's decisions these days.

  The mayor also cut 10 percent from the district attorney's office — and saddled the DA with $700,000 in health insurance costs for his staff. Under DA Leon Cannizzaro's leadership, the number of felony prosecutions and convictions has increased sharply. That kind of performance merits not only continued funding, but also increased support. Nagin proposed the opposite.

  Ultimately, the council acquiesced and added back $5 million to the budget. In return, Nagin has promised to restore several programs, including the blight hearings and $800,000 to the DA's office. The latter figure is two-thirds of the $1.2 million Cannizzaro hoped to get.

  We loathe the mayor's tactics, but the council could not afford to call his bluff. Nagin held citizens and the recovery hostage to get his way, and that will be part of his meager legacy when his tenure ends on May 3. Looking ahead, there is cause for optimism: Nagin's days as mayor are numbered. Moreover, if the revised revenue projections prove to be too optimistic and the budget has to be revised again, New Orleans will have a new mayor and a new council at the helm. Hopefully, a new spirit of cooperation will prevail at City Hall — along with a more mature approach to budgeting.

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