New Orleans is in line to receive $377 million of the $1.9 trillion set in the American Rescue Plan. While at her Thursday press conference Mayor LaToya Cantrell had encouraging words for how the federal stimulus money will help local businesses and residents, her Chief Financial Officer painted a very different picture of the city’s financial future.
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“We are not out of the woods yet,” said New Orleans CFO Norman White at the mayor’s press conference on Thursday. “And that is not simply because we have not yet received the money, it is because our problem continues beyond one year…so even though we know we are receiving monies, the key is; it is not enough.”
White says in 2018 the city had a budget surplus until the pandemic hit the city with a 20% reduction in the budget with no revenue source to replenish that loss.
“To cure our deficit problem…we had to get a $50 million loan, we had to cut our budget anywhere from $25-$30 million… we had to use additional money from other sources to the tune of $50 million…and on…and on,” said White. “That continued to solve our problem. In 2021 we developed our budget, we had to cut it immediately by $20 million. And that is where we stand.”
He says much of the ARP money the city will receive will go towards paying back those loans and $480 million repurposed money from Harrah’s the city took to stay afloat.
“And then we begin to cure the $100 million problem we have now,” said White. “Going forward we have to close the gap between what those pre-revenue conditions were versus the post-revenue conditions and that means providing the adequate services for our citizens moving forward.”
White says one day one of receiving the ARP federal money, the city will have to shell-out over $160 million. White also says the numbers project the city won’t get back to its 2018 revenue until 2024.