The city government has known for several months that they were running an operating deficit. But it wasn’t until the state legislative auditor, Michael Waguespack, informed the New Orleans City Council in October that the deficit was in the range of 160 million dollars that the degree of the crisis became clear.
To meet the city charter requirement of submitting a balanced budget by the end of the year, the City Council is currently negotiating a loan from state officials. The loan would be repaid over six months. As a condition of receiving the loan, the council will need to agree to greater financial oversight from the state.
In addition to acquiring the loan, the council is considering cost-cutting measures including layoffs, furloughs, and cuts to city services…