Cantrell request council approval for $100M loan to offset budget deficits from COVID-19
NEW ORLEANS, La. (WVUE) - Mayor Latoya Cantrell is asking the city council to support borrowing 100 million dollars. The money would help offset the deficit caused by the Covid-19 outbreak.
City councilman Joe Giarrusso says there is still more he wants to know about the potential loan but says he views it almost as a safeguard as there are so many unknowns.
He explained how the $100 million loan, officially called a certificate of indebtedness, would be taken out against the city’s future earnings. That includes revenues like property and sales taxes.
The city would pay that loan back over several years and would go to help fund essential services.
Giarrusso said though he wants to know exactly what is considered essential services if it would cover only police and fire, or potentially much more.
He said there is so much that's unknown right now between what potential federal or state help could be coming in the future, including what money the city could see when it begins to reopen and when.
He says now he supports the loan, saying this could be a potential way to help protect against holes in the city's budget.
“The mayor’s estimated we could be close to $150 million hole that’s roughly 15% of the entire city budget so if you’re saying we need a roughly borrow 10% of the city budget to make up for shortfall, it’s not a place where anybody wants to be and certainly we want to make sure we’re providing all of these crucial, crucial services to our citizens particularly when so many have been affected by Covid-19 itself or by being out of work,” Giarrusso said.
Giarrusso said the city would be paying back this loan through the city’s general funds collected in the future.
For perspective, he said the city collected around $157 million in property taxes this year. Giarrusso also said he does not see this loan creating higher taxes in the future, but could mean some city services, departments, and jobs could be whittled down.
The mayor’s administration did not return a request for comment.
The matter is scheduled to be discussed on May 7.
Copyright 2020 WVUE. All rights reserved.