New Orleans Proposed Budget Cuts Raise Concerns About Impact on Vulnerable Residents

New Orleans officials are facing difficult decisions as Mayor Helena Moreno’s Administration works to close a nearly $100 million gap in the city’s 2027 budget, with proposed reductions raising concerns about the potential impact on vulnerable residents and essential services.

The administration presented a plan to the New Orleans City Council that anticipates approximately $748 million in recurring revenue against roughly $847 million in expenses. The proposal seeks approximately $77 million in direct spending reductions, with additional one-time and special-purpose funding helping close the remaining gap.

Mayor Moreno described the proposal as a difficult but necessary step toward stabilizing city finances after financial challenges that carried over from the previous year.

Homeless Services Face Potential Reduction

Among the most closely watched proposals is a $5 million reduction affecting the city’s low-barrier homeless shelter. The shelter, located at the former Veterans Affairs Hospital, provides services without requiring identification, payment or sobriety testing and has helped nearly 500 people transition into permanent housing since 2018.

City Councilmember Lesli Harris has raised concerns that losing the shelter could put as many as 200 people back on the streets and increase pressure on nonprofit shelters and other service providers.

Chief Administrative Officer Joe Giarrusso said the administration is still early in the budget process and indicated that City Officials will continue exploring alternatives and the role other agencies can play in funding Homeless Services.

Health and Community Programs Also Affected

The proposed reductions extend beyond homelessness.

The New Orleans Health Department faces a 51 percent budget reduction under the proposal, while Public Works would see a 35 percent cut. The city’s Community Development Budget would be reduced by approximately 90 percent, while funding for Workforce Development would be eliminated. Other reductions would affect Sanitation, Public Safety Agencies and Mardi Gras Cleanup.

The administration also proposes eliminating 152 full-time city positions while maintaining a hiring freeze. Moreno has said there will be no employee furloughs in 2027.

Some programs would be protected. The proposed budget does not cut the New Orleans Recreation Development Commission or the Council on Aging, and the administration has said it intends to protect Frontline Public-Safety Personnel as much as possible.

Search for Additional Revenue

City Officials are also considering revenue options that could reduce the depth of some cuts. Those options include rolling forward eligible property-tax millages and increasing certain fees. Depending on which millages are approved, City Officials have estimated they could generate tens of millions of dollars in additional revenue. A public hearing on a possible millage increase is scheduled for Oct. 29th.

The proposal is not final.

City Council Members will continue reviewing the administration’s spending plan and can make changes before adopting the 2027 budget. Budget hearings are expected to continue through the fall, with final action required before the new fiscal year.