With all the merrymaking, you’d probably never know New Orleans is falling apart.

There is, to be sure, a good deal of mirth still to be found in this city that prides itself on its ability to party into the night, this Disneyland for adults.

Jim Monaghan, the owner of Molly’s bar, is seriously running for City Council on a single issue: getting rid of all the parking meters and meter maids.

The shoeshine boys still stop strollers in the French Quarter and say: “I bet I know where you got those shoes.” The answer, of course, is on your feet.

But there is also an undercurrent of gloominess. New Orleans, at a time when it is making a serious bid to host the 1992 Democratic National Convention, is falling apart.

“We’re in deep trouble,” said mayoral candidate Donald Mintz. “We are a city in crisis.”

Mintz’s words are not just political rhetoric. There are few who would contradict him. A combination of factors have come together that make New Orleans a place where crime is on the rise, where businesses are reluctant to relocate, where the police department is undermanned and where the criminal justice system has only enough money to get through the first half of 1990. Business Month magazine recently rated New Orleans as one of the “worst examples of urban management in America today.”

Parts of the city have turned into virtual war zones. New Orleans’ major crime rate was up 18% for the first six months of the year, and it is almost certain to have more homicides in 1989 than at any time in the city’s long history. It is ranked fourth in the nation in homicides per capita. “It’s been a banner year for homicides,” Sheriff Charles Foti said.

Foti and others point to crack cocaine as the reason for the dramatic rise in crime. That, in turn, has contributed to white flight, even though the homicides and other crimes take place almost exclusively in the city’s black ghettos.

“The battles are over what square footage in a housing project a dealer will have,” Tulane sociologist Dwayne Smith said.

The statistics seem to bear that out. Of those killed this year, 87% were black and 75% were black males.

If a rise in crime was New Orleans’ only problem, the city would hardly be distinctive from the rest of the nation. But the city’s ills go much deeper, in large measure because the money to run New Orleans’ infrastructure has dried up. Before the oil bust, New Orleans was one of the major recipients of the state’s oil revenues. With that money down to a trickle, the problems keep mounting.

For one, the low-paying Police Department is understaffed, with 200 fewer officers on the force than there were 10 years ago. Cruisers have been known to sit idle because there are not enough policemen for a shift. And on other occasions, patrolmen have had to repair their own cruisers because the alternative has been having no car to drive. A recent survey by Southpoint magazine of Southern police departments ranked New Orleans’ at the bottom of the list, citing the “institutional lethargy that plagues the city” as one of the main causes.

Then comes the prison system, which is a major mess. The state prisons ran out of space years ago and now the backup is hurting city systems, the largest of which is New Orleans. Sheriff Foti said the city jail had gone from housing 700 prisoners per day 16 years ago to an average of 4,000 today. That, in turn, has led to what Foti referred to as a “swinging door” policy, in which prisoners are quickly let out because of lack of space. More than 11,000 prisoners have been released this year from New Orleans jails under an emergency program implemented because of overcrowding.

“Felons know that if they are arrested, they won’t be incarcerated,” University of New Orleans economist Tim Ryan said.

With so little money, the city’s judicial system is in trouble. The courts and other departments have had their budgets slashed so much that it will be difficult, if not impossible, for them to operate past the first half of the year. Mayor Sidney Barthelemy has asked the state for help to keep the courts running, but the request received only a lukewarm response from the already strapped government.

In other cities, financial crunches are followed almost immediately by an increase in property taxes. But Louisiana residents have a $75,000 homestead exemption and have voted resoundingly in the past not to change that. So New Orleans has taxed businesses instead, making the city less than appealing for companies looking to relocate. New Orleans’ deteriorated public schools are also an obstacle to attracting business.

If there is an answer to all this, New Orleans has not yet found it. Some suggest that New Orleans, like other cities in the depressed oil patch, must diversify its economy. But Ryan sees a problem with that. “We’re not going to be able to do that if people don’t want to live here,” he said.