New Orleans will soon sell $125 million dollars worth of bonds to help cover the budget deficit it's facing through the end of the year. While the city won't be getting that bond money from the state of Louisiana, lawmakers and other state officials will be keeping a close eye on how the city handles its debt.
Louisiana Senate President Cameron Henry says state officials balked at giving New Orleans a loan to fill its budget hole because of concerns the city wouldn't be able to pay back that loan.
"We didn't want to hurry up and give the city $125 million without the proper safeguards in place, and we're working towards those now," Sen. Henry (R-Metairie) said to WWL's Tommy Tucker. "I think by next Wednesday we'll have all of those finalized."
Henry said he wants to give Mayor-elect Helena Moreno's administration a chance to fix the budget problem and get the city's finances back on track
"I didn't think it was a good idea to have the city go under a fiscal administrator without giving the new administration the ability for success," Henry said. "A fiscal administrator is a pretty tough title to walk back once you have it, and it's a significant responsibility for the auditor to now run the city of New Orleans, so we're going to give this new administration a chance. We have a timeline of that for June or July of next year when the debt will be paid back, and we'll see what this administration can do, and then we can revisit the issue."
He also balked at the idea of putting a fiscal administrator in place because he says it would have been a bad look for the city and state when both are trying to attract business and tourists.
"It's not a good mark for a city to have that. It's not a good mark for the state to have that while we're simultaneously trying to get Super Bowls here and just improve the reputation of the state as a whole," Henry said. "As I talked to my colleagues, they appreciated that as long as we had the safeguards in place, which we will have now, as if we were under a fiscal administrator," Henry said.
Henry adds that conversations between city and state leaders over the last week have been productive.
"These are very practical conversations. We're hearing very common sense conversations. Everyone is in agreement," Henry said.
Henry says he expects the city government to pay off the bonds by June or July of 2026. Then, Henry said, the state will revisit the issue to see if New Orleans needs more financial assistance.
"The city will receive about $500 million in late January (or) early February, so they'll begin paying off the $125 million," Henry said, referring to the city's anticipated property tax revenue. "I think there's no need to panic right now. We're going to right this ship for New Orleans, and I think at the end of the day, it's going to be positive for everyone."
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