Millage adjustment proposed for New Orleans

Mayor Ray Nagin is proposing that millage be adjusted to raise more than $24 million to help replenish it.
Nagin, who will deliver his 2009 budget proposal to the City Council on Tuesday, said a so-called “roll forward” of 10 mills would not be a windfall for city coffers. Rather, he said, it would restore reserves that are crucial if another hurricane forces an evacuation, and vital for the city’s efforts to prove to state and federal officials it’s on its way to financial self-sufficiency three-plus years after Hurricane Katrina.
Gustav, which dealt the city a glancing blow last month, cost about $40 million, city officials said. While much of that’s expected to be reimbursed by the Federal Emergency Management Agency, it’s not clear how quickly. Nagin imposed a freeze on hiring and additional spending by departments in response.
Even with the millage change, the city would end up with a reserve and undesignated fund balance short of its eventual goal of 10 percent of expenditures.
Overall, the city’s budget is expected to top $1 billion, but Nagin said the operational side would essentially be flat.
The City Council could have adjusted the millage last year but did not, worried about further taxing hard-hit residents. Those worries remain. City Councilwoman Cynthia Hedge-Morrell, who chairs the council’s budget committee, said the council would have to look at the millage change, plus possible cuts in the budget