New Orleans cost-cutting measures are paying off, report says
A recent report highlights that New Orleans’ cost-cutting measures, including hiring freezes, limits on overtime pay, and tighter control of government contracts, have resulted in significant savings totaling approximately $70.3 million as June. The city implemented a hiring and promotion freeze that alone is expected to save $11.2 million annually. Additionally,overtime caps have helped reduce overtime expenses by around $3 million yearly. Nonessential spending has also been largely frozen, with stricter reviews required for new purchases and contracts. These measures address the city’s worsening financial situation, which prompted securing a $125 million loan from the State Bond Commission to cover payroll and cash shortfalls. Looking ahead,New orleans approved a $1.6 billion operating budget for 2026 featuring $150 million in cuts and increased revenue, though more short-term borrowing may be necesary while the city rebuilds reserves.
New Orleans cost-cutting measures are paying off, report says
(The Center Square) − Hiring freezes, limits on overtime pay, and a clampdown on government contracts have saved New Orleans tens of millions of dollars since the city began reining in its spending earlier this year, according to a new report.
In a biweekly expenditure report sent Monday to the city council, Chief Administrator Officer Joseph Threat Sr.’s office outlines about $70.3 million in projected savings from cost-cutting measures that began in June. The council is expected to discuss the report on Wednesday.
A citywide hiring and promotion freeze that took effect June 30 produced the largest immediate savings on the personnel side, the report said. The city estimates the freeze will save about $11.2 million annually – roughly $2.3 million from reduced hiring and $8.9 million from positions left unfilled. In the most recent two-week period covered in the report, those measures accounted for nearly $980,000 in savings.
The administration also reports progress on curbing overtime pay, a key contributor to the city’s cash crisis.
The city set overtime caps in June and ordered departments to submit 90-day projections each month, and as a result, expects to save roughly $3 million in overtime costs each year. City departments cut about $675,000 in overtime over the latest two-week span.
City Hall has also frozen most nonessential spending. Since June, new purchases and contract changes have faced stricter reviews, and a Sept. 16 memo ordered departments to lock in any needed spending by Sept. 30 and cut back on everything else.
The reductions were put in place as the city’s finances worsened this year.
In mid-November, city officials secured a $125 million loan from the State Bond Commission to bridge a mounting cash shortfall and cover payroll expenses. The loan includes tight oversight from the state.
NEW ORLEANS APPROVES $1.6B BUDGET WITH $150M IN CUTS
The city will likely need to seek more short-term borrowing in the next few budget cycles while it rebuilds its reserves and reins in spending, officials have said.
In early December, the city unanimously adopted a $1.6 billion operating budget for 2026 that includes around $150 million in cuts and $74.5 million in previously untapped revenue.
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