Mayor Cantrell and CAO Present Proposed 2026 Budget, Urge Revenue Increases and Cuts to Close Shortfall

Mayor LaToya Cantrell presented the City of New Orleans— proposed 2026 capital and operating budgets on Oct. 1, saying the administration will seek both spending reductions and new revenues to close a fiscal gap while avoiding furloughs.

"The city of New Orleans is a world class city," Cantrell said as she opened the presentation, while urging the council to back measures to increase local revenue. The administration is proposing several fees and tax changes, including a 0.5 percentage-point local sales tax increase, higher parking rates and fines, revised sanitation fees and updates to permit and licensing fees.

The city—s chief administrative officer, Joseph Threatt, told council members the municipality faces a structural shortfall. "The city's last financial audit for 2024 showed a fund balance at the end of the year of 205,000,000, but only 40,000,000 of that balance was cash on hand," Threatt said. He said personnel and event-related overtime were major drivers of the current deficit and that the administration has included $24,000,000 for expected overtime in the executive budget.

Why it matters: City leaders said the shortfall is the product of one-time federal funding that has been spent down, higher personnel costs and event-driven operating expenses that exceeded prior revenue projections. The administration framed the proposal as a course correction to rebuild cash reserves and avoid layoffs or furloughs.

Key details

- Size and cash: The 2024 audited fund-balance figure cited by the administration is $205 million with about $40 million in cash on hand.

- Personnel shortfall: Council and administration officials identified roughly $70 million in additional personnel-related spending that contributed to the…