NO mayor outlines city's 2013 budget

Cuts, proposed fee on electric bills including in New Orleans Mayor Landrieu's city budget

Associated Press

NEW ORLEANS (AP) -- Cuts of 8 percent to 10 percent in many city departments and a fee increase on electricity bills are among the proposals in the $491 million budget New Orleans Mayor Mitch Landrieu put before the City Council on Monday.

Landrieu said the franchise fee on Entergy-New Orleans power bills will amount to about $2 to $3 per month for most households if the council goes along with the proposal. It would provide a source of revenue for street light repairs after emergency grant funds run out.

Declining revenue means the budget is about $5 million smaller than last year, even as the city faces new expenses. The budget includes $7 million for improvements to the police department under an agreement with the U.S. Justice Department, an agreement that is expected to cost the city $50 million over the next five years.

City officials don't foresee major layoffs. The police, fire and emergency medical services departments will be spared the cuts of between 8 percent and 10 percent that many departments will see, Landrieu said. However, the fire department will shrink as some firefighters retire. Landrieu said fire protection will remain strong.

Landrieu also said his own office's budget will be cut by 25 percent.

"We all will share in the pain, and I believe we can do so without massive layoffs or furloughs," Landrieu said.

The council begins hearings on the budget next week and must approve a budget by Dec. 1.

Presenting details of the budget to the council following Landrieu's news conference, chief administrative officer Andy Kopplin cited reasons for lower revenue, including lower franchise fee collections and tax revenue from Entergy, due to lower natural gas prices that led to lower utility bills; lowered expectations for traffic fine revenue; and lower projections for sales taxes.

Funding for the state's criminal district court in New Orleans and for juvenile court will be cut by more than 30 percent each. Kopplin noted Supreme Court analyses that said both courts could operate on smaller budgets.

Landrieu and Kopplin took pains to note the budget problems inherited when the new administration took over in 2010, faced with a $97 million budget gap.

Landrieu also castigated the state, saying it is failing to fully fund obligations including public defenders and mental health services.

The cuts come even as the city concludes a year of hosting major events, including a BCS Championship game and the NCAA Men's Final Four, while preparing for the Super Bowl in 2013. But, officials said, the increase in tourism doesn't mean a major boost in city revenue. For instance, the city gets only 1.5 percent of a 13 percent hotel-motel tax and 2.5 percent of the 9 percent in general sales taxes collected.

"We can't host our way out of a budget crisis," Landrieu said.

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