New Orleans CAO says city could lose up to $140 million in tourism spending

NOLA Pandemic Finances

NEW ORLEANS, La. (WVUE) - New Orleans city leaders knew their finances were in trouble when major events with tourism dollars started calling it quits, back-to-back, because of COVID-19.

“The bottom dropped, there’s no doubt about that and we’re having to manage accordingly,” said Gilbert Montano, the city’s chief administrative officer.

Montano projects the city will lose between $100 to $140 million dollars in potential revenue.

“It has been an extremely heavy lift,” Montano said. “We’ve had dozens and dozens of departments that’s had to submit cuts, budget reduction plans.”

There are no plans to disrupt city services or cut employees, this year. He says at the start of the pandemic he played out different scenarios with the same results – loss in revenue.

“Part of the inclusion of that sensitive analysts is factoring in no events, no Mardi Gras, no Jazz Fest, no football season, no tourist no hotel tax,” he said.

But he says the city has been able to stay afloat despite the loss, “we’ve managed through some of the hardest time we’ve ever faced,” said Montano. “We’ve watched our bank accounts almost drop to nothing and still be able to provide the services and maintain the workforce that has not felt layoffs of furlough.”

On top of planning, he says the city continues to make difficult decisions. He and the city’s department heads are working to limit costs by reorganizing departments, cut overtime when possible, implementing a hiring freeze, offer early retirement packages.

Now he is looking for extra cash, everywhere, like when people die and leave money to city libraries or departments.

“Those sit in trust,” Montano said. “Those had not been brought to commerce or spent in any way so we sent some real forensic auditors to be able to determine where those dollars were how we could use them, how we could leverage them.”

Even as the city attempts to save costs, Montano understands he may one day have to make tough decisions.

“If things get worse and worse and worse, we will have to look at [firing employees]. Right now, we’ve managed through the crisis and I hope and foresee us probably getting there through at least the end of the year. At least through the budget process, is one of my goals,” Montano said.

Montano says raising taxes is out of the question, “raising taxes in an economy as delicate as this. Raising taxes in an environment as such where everybody is feeling the pain is certainly not the most prudent or wise decision.”

The CAO will present to city council next week.

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