Thursday, November 02, 2006

One Born Every Minute

Despite the huge cost increases, the city does not plan to raise the $12 monthly garbage fee paid by residents. Instead, to cover the increased cost over the current contract with Waste Management, which currently collects garbage citywide once a week for $9.4 million annually, officials said they will tap the city's general operating budget and a low-interest federal loan secured after Hurricane Katrina.

Chief Administrative Officer Brenda Hatfield said the total package of increases, including the already-implemented police raises, would cost the city $3.1 million for the last four months of 2006 and $11 million for all of 2007.

She said the city can pay for the raises because of improvements in the city's economy and revenue picture and the arrival of federal community disaster loans.

Having postponed the politically unpopular task until after the April 22 primary, the New Orleans City Council voted this week to approve a package of 2006 property tax millages that includes a sizable increase in the city’s tax rate to help pay off its debts.

The City Council adopted the final millage rates earlier this month, and reassessments have now been completed. These taxes will generate the revenue necessary to continue providing needed City services.

The property tax increase that seems to be having at least some impact on rents was necessary to keep the government running. Nagin's pet projects are being paid for by the federal government. And the city needs to spend millions to replace Waste Management with Metro Disposal because there were so many complaints in the past.

Relying on the federal loans would make sense if you were assuming 1) the loans will ultimatley be forgiven and 2) the build up of costs for police and fire and restoration of other city services was based on some rational projection of growth, which I think would be hard to do at this point even if we had a rational mayor.

Borrowing money is also rational if you think you will be on to another gig before it has to be repaid.
We need to give raises to police officers and firefighters--both departments are losing manpower. But everyboby would admit that the other pay raises are optional; whether you approve or disapprove of them, city hall wasn't facing a staffing shortage without them. Even if you think the changes to garbage collection will be an improvement, it's obviously an added expense that can wait. Ultimately everything comes out of the same limitted pool of resources. By saying that the federal money was paying for the optional stuff, Nagin sucessfully muted opposition, especially to the pay raises. For some odd reason, the Picayune pointed out how questionable across-the-board raises were (at least for the more well-paid employees) but didn't emphasize it. Saying that the feds will help pick up the cost might quiet local objections, but I suspect that it will make it harder to get forgiveness for the loans. I wouldn't expect congressmen from other states to vote to forgive a loan that went for pay raises, especially since they'll probably be reminded about Nagin's earlier "the cost doesn't matter because FEMA will pay for it" comment.
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