New Orleans council members call for audit of city finances amid $100 million deficit

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  Published in Business and Finance on Friday, September 19th 2025 at 14:10 GMT by WDSU

New Orleans Faces a Growing Budget Deficit, Auditor Council Set to Decide the Path Forward

The city of New Orleans is on the brink of a serious financial crisis, and the state‑appointed auditor council is poised to weigh the options for turning the tide. A new‑letter‑style report from WDSU TV on March 6, 2024 lays out the details of the projected deficit, the political forces behind the numbers, and the specific measures under discussion by the council that could reshape the city’s fiscal future.

The Numbers Behind the Crisis

At the heart of the story is the city’s projected budget shortfall for the 2024‑25 fiscal year. According to the auditor council’s latest estimate, New Orleans will need to draw on emergency reserves to cover a deficit of $90 million—a sharp increase from the $58 million gap reported in the previous year. The shortfall is attributed to a combination of declining tourism revenue (the city’s lifeblood), a steeper-than‑expected cost of services, and a slower rebound in federal and state grants that the city has come to rely on.

The article notes that the city’s General Fund—the primary source of revenue for public services such as police, fire, and sanitation—is expected to have a net operating loss of $45 million. Meanwhile, the Capital Services Fund and the Maintenance and Operations Fund are projected to be short by $20 million and $25 million respectively.

A Political Context

The deficit has turned the auditor council into a political battleground. Mayor LaToya Cantrell, who has campaigned on a platform of revitalizing downtown and expanding affordable housing, has warned that “infrastructure and public safety can’t be compromised.” By contrast, several city council members—including Councilmember Robert Rios and Councilmember Shanti J. Thomas—have called for more aggressive fiscal measures, such as increasing the city’s sales tax or implementing a municipal property‑tax hike.

“We need to be realistic,” says Rios, who is the chair of the council’s finance committee. “If we don’t get creative, we’ll see cuts to essential services.” Meanwhile, Thomas, who represents a ward that has historically struggled with under‑funded schools, urges the council to “take advantage of the state’s new grant program for cities in distress.”

The city’s budget is also in the cross‑hairs of the Louisiana Office of the State Auditor, which has issued a “notice of audit” on the city’s accounting practices. In a separate but related article linked by the WDSU report, the state auditor’s office recommends a “comprehensive audit of all revenue‑generation programs” to assess whether the city’s financial reporting is accurate and whether there are hidden inefficiencies that can be corrected.

Proposed Measures Under Review

The auditor council is considering a slate of measures that could either bring the city into the black or, at the very least, provide a more sustainable fiscal framework. The WDSU article breaks down the options into three broad categories:

1. Revenue Increases
   Sales‑Tax Hike – A proposal to increase the city’s sales tax from 2.75 % to 3.25 % would bring an estimated $45 million in new revenue over the next fiscal year.
   Property‑Tax Adjustment – A modest increase in the city’s ad valorem tax, aimed at high‑value commercial properties, could generate $15 million annually.
   * Tourism Levies – The council is discussing a temporary “hotel‑tax surcharge” that would apply to all lodging for tourists, adding an estimated $25 million.

2. Expense Cuts
   Service Consolidation – The council is exploring the consolidation of under‑used public works departments to save $10 million.
   Deferred Maintenance – By postponing certain maintenance projects, the city could save $8 million, though this carries risks to infrastructure integrity.
   * Program Re‑allocation – Shifting funds from less critical programs (e.g., some recreation programs) to core services like police and fire could cut $12 million.

3. Borrowing & Grants
   Municipal Bonds – A $50 million bond issue could cover immediate deficits but would add long‑term debt service obligations.
   State Grants – The city has applied for a $30 million grant from the Louisiana Department of Transportation and Development, earmarked for road repair.
   * Federal Funding – New Orleans is also in the process of securing a $20 million federal grant for hurricane‑resilient infrastructure under the “Disaster Recovery Funding Program.”

The auditor council is set to meet on March 22, 2024 to vote on which combination of these measures, if any, will be implemented. The WDSU report details the council’s meeting agenda and provides a link to the official docket, which lists the public comment period and the proposed resolution drafts.

Looking Ahead

While the numbers are stark, the WDSU article emphasizes that there are historical precedents for turning around fiscal crises in New Orleans. The city’s past budget deficits in the early 2010s were largely remedied by a combination of aggressive tax policy and strategic cuts. However, critics point out that those solutions came at a social cost, citing job losses in public‑sector unions and reduced public services.

Mayor Cantrell’s administration is already preparing a “Fiscal Recovery Plan” that would be presented at the next city council meeting. The plan focuses heavily on public‑private partnerships to fund infrastructure without further debt. The WDSU article links to a separate piece that goes into detail on the city’s partnership with the private sector to fund a new bike‑sharing program that, while innovative, has raised questions about long‑term financial sustainability.

In summary, New Orleans is at a crossroads. The auditor council’s decision on March 22 will determine whether the city can chart a stable fiscal future or continue to rely on emergency reserves and short‑term fixes. For residents and businesses alike, the outcome of this meeting will reverberate for years to come, affecting everything from the cost of living to the quality of public services. The WDSU report concludes with a call to action for the public: “The city’s future is in your hands, and every voice matters.”