Thursday, April 13, 2006


Unusual times will require unusual responses


The Public Affairs Research Council of Louisiana is not known for hyperbole in the studies it releases on important state issues. So when PAR recently issued a report declaring that the city of New Orleans and the Orleans Parish School Board are “teetering on the edge of the cliff” in their post-Katrina finances, we were reminded that we live in unusual times that will require unusual responses.

In the study that it undertook with the New Orleans-based Bureau of Governmental Research, PAR concluded that bankruptcy should be considered as one option for New Orleans-area governments confronting cash crises.

In New Orleans, the city government’s debt service is estimated at $96 million this year. Required payments on that debt service will exceed property tax collections this year.

According to PAR and BGR, the Orleans Parish School Board is dealing with chronic cash-flow problems, and New Orleans’ city government is about a month away from running out of cash.

Using one-time grant money to meet recurring expenses creates problems. It is also unrealistic to expect the state to assume the burden of funding New Orleans-area government on an indefinite basis.

Like PAR and BGR, we are not yet ready to embrace bankruptcy as a solution for New Orleans-area governments.

But the very mention of this prospect underscores the urgency of the crises and the need for state, local and federal officials to work together to find creative solutions.

LPNS COMMENTARY: The only "creative solution" on the table is Mayoral candidate Peggy Wilson's "TAX FREE CITY."

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