New Orleans City Council Approves $125 Million Loan to Address Payroll Crisis Amid Budget Uncertainty

New Orleans is facing a severe fiscal crisis that threatens city payroll and services, with city officials scrambling to secure emergency funding to cover payroll through the end of the year. The City Council unanimously approved seeking up to $125 million in Revenue Anticipation Notes as a short-term loan, banking on $120 million in federal grant funds from President Donald Trump's administration to repay the loan, though this funding remains uncertain. City employees, represented by AFSCME Local 2439, have expressed serious concerns about job security amid furloughs, hiring freezes, and delayed payments, emphasizing the hardship on thousands of families. Officials cite multiple factors contributing to the crisis, including unexpected emergency responses, overestimated event revenues, and alleged mismanagement of expenditures, particularly excessive overtime. The city has also delayed federal reimbursements for FEMA projects, exacerbating cash flow problems, while options like tapping the emergency savings fund or relying on state bond commission approval are seen as last resorts. Mayor-elect Helena Moreno acknowledges the risk involved with the loan but considers it a necessary bridge to maintain payroll and government operations during this challenging period.