City Fights $10-Million Deficit : Red Ink Vies With Blues: 4-Day Week in N. Orleans

How bad are things in New Orleans? So bad the city is closing down today.

Bourbon Street may still swing, but City Hall will be locked. Police and fire protection will be drastically cut. Paying the water bill or getting a car inspection will be out of the question. So will checking out a book at the public library.

Any complaints to Mayor Sidney Barthelemy will have to wait until Monday. His honor will not be in.

That is indeed how bad things are in New Orleans. From now until the first week in December, the city is closing its doors each Thursday evening for a three-day weekend, hoping that the move will erase a $10-million deficit in funds. City workers, from the mayor on down, must live with a 20% pay cut for the next two months.

“The choices were between a rock and a hard place,” said Mike Doyle, the deputy director of the Civil Service Commission. “The alternative was to lay off 3,000 to 4,000 people for the rest of the year.”

What’s more, the idea of a shutdown as a way to solve money problems appears to be catching on in Louisiana. Gov. Edwin W. Edwards announced Wednesday that all state offices will close their doors twice a month, a cost-cutting measure that will mean a 10% pay reduction for all state employees, who have not had a pay raise since 1981.

Edwards said the closures, along with a 3% across-the-board spending cut, will save the ailing state $100 million a year, and he vows they will last until the Legislature convenes in special session to deal with the state’s budget crisis, brought on by the drop in the price of oil, Louisiana’s main source of revenue. The state faces a projected deficit of $384 million for the fiscal year.

In New Orleans, the idea of knocking off on Friday is Mayor Barthelemy’s brainchild. Since he took office five months ago, the city has reduced its work force by 2,000, and even more cuts are planned to help balance the budget.

Until more money is available, the fire department is closing five stations completely. Nine health clinics will be among the services closing on Fridays.

The mayor contends that he inherited the financial crisis from the man he succeeded, Ernest (Dutch) Morial. The former mayor, in turn, charges that he was handcuffed by a hostile City Council bloc, of which Barthelemy was a member.

‘Did Not Cut Spending’

“The previous administration dumped $7 or $8 million worth of bills over to this year,” Barthelemy complained. “They over-projected the revenues and they did not cut spending back. He (Morial) knew he was shoving some of the bills back and he knew the city was carrying a significant deficit, but he didn’t do anything about it.”

But Morial tells a different story, calling Barthelemy an inept administrator who is trying to duck the blame. He said he sought revenue-raising reforms, but the council, including Barthelemy, would have none of it.

“When you’re in office, you can blame the guy who’s out,” he said. “I have no forum. But the word on the street is that he’s going to be a one-term mayor.”

Barthelemy did try several other avenues before carrying out his plan to close the city on Fridays:

--He went to the federal government and asked for grant and program assistance, but got none.

--He went to Gov. Edwards, who told him times were tough all over and that New Orleans could not be a special exception.

Sought Approval for Casino

--He even went so far as to ask the Legislature for a casino in the city to attract more tourists. The lawmakers turned him down, just as they turned down Edwards’ own grandiose proposal to make New Orleans the Las Vegas of the south.

Barthelemy said the legislators rejected the casino option because it would not have been politically expedient. “They’re coming up for reelection, and northern Louisiana is a fundamental religious area,” he said. “They didn’t see it as helping them politically.”

New Orleans’ major funding obstacle is its inability to raise money through property taxes. Under state law, the first $75,000 of a home’s value cannot be taxed. It is a standard joke here that assessors, who are elected officials, put ridiculously low valuations on property.

As a result, Barthelemy said, 85% of the homeowners in New Orleans do not pay a nickel in property taxes.

To counter this, the mayor asked for a $195 fee on all real estate transactions, but the voters overwhelmingly defeated that measure at the polls in September.

Tax on Earnings Passed

The council’s final move was to pass a 1.5% tax on earnings, but that measure is already being challenged in the courts and there may be years of legal battles ahead.

There was, however, one bit of good news. The Friday closing of city services had originally been scheduled to continue until January, instead of December. But the city and the water and sewer board hatched a deal Wednesday that would add $3 million to the municipal coffers. The board basically agreed to speed up the purchase of municipal lands that it had planned to buy from the city over the next several years.

On Wednesday, Barthelemy was courting members of the Democratic National Committee who were looking at New Orleans as a possible site for the 1988 convention. The convention would be a multimillion-dollar boon to the city.

“I think we have a shot at it,” he said.

But in the meantime, he has 5,100 city employees taking home a smaller paycheck until a few weeks before Christmas.

“They are not happy about it,” he said.