Landry push to takeover New Orleans scuttles $125 million stopgap spending plan

New Orleans city officials Oct. 29 dropped their plan to ask for a short-term $125 million dollar stopgap loan through the end of the year after Gov. Jeff Landry’s administration refused to drop a takeover of city government as a precondition.

That means the city will look to austerity measures and other mechanisms to keep government running, including potential furloughs, overtime restrictions for NOPD and other first responders, spending cuts that could mean infrastructure project delays and other reductions in services.

A takeover of the city by the Landry administration could have sweeping implications for life in New Orleans. An administrator overseeing a city’s finances has enormous powers, including the ability to defund a host of human rights, environmental and health programs Republicans vehemently oppose.

For instance, an administrator could defund city vaccination programs, education programs for kids in detention, programs for the unhoused or maternity programs that don’t discriminate on the basis of gender identity or marital status.

The state’s Bond Commission was expected to hold a hearing on the short-term loan request Thursday. But city officials decided to withdraw the request after Murrill made clear that she and Landry, who both serve on the board, would only agree to a loan if the city agreed to their takeover plans.

According to a City Hall source, Council President JP Morrell and Mayor-elect and Council Vice President Helena Moreno tried to make the case to Murrill that “we are being responsible grownups doing all the grownup things, and here’s all the things we’re willing to do ... but the one third rail is having a financial administrator,” which would hand over de facto control of the city to Landry.

That came even after the City Council earlier in the day passed a series of resolutions creating fiscal safeguards for the loan designed to ease concerns amongst other Republicans on the board.

The council also approved an investigation into Mayor LaToya Cantrell’s handling of city finances during her second term and began the process of adding additional fiscal restraints to the city’s charter, also in hopes of demonstrating the city is working to improve its financial performance.

In a statement on social media, Moreno said “the state attorney general has put a contingency ... we must allow for a fiscal administrator to come in and really take over city functions. Unfortunately, I cannot stand for that.”

Moreno also dismissed the AG’s allegation that she had refused to put in place safeguards, pointing to the multiple safeguards the council passed earlier in the day. “I’m willing to do all sorts of oversight measures, but I'm not going to have a state fiscal administrator come in and take over the city of New Orleans,” Moreno said.

What will happen next is unclear at best. Members of the council and the Cantrell administration are expected to meet with state lawmakers and members of Landry’s administration next Wednesday in Baton Rouge to discuss the city’s finances.

In theory, those talks could lead to a new short-term loan request, though given Murrill and Landry’s enthusiasm for taking control of the city’s government it seems unlikely.