As I expected, the New Orleans City Council’s Hail Mary play to borrow a huge sum to stave off making substantive changes to the status quo has run into headwinds in Baton Rouge. The governor has issued a statement asking Republican legislators to turn down approval of an emergency loan. We cannot but assume that he wouldn’t have done so without taking the temperature of the GOP delegation.

Gov. Jeff Landry on Tuesday (10/28) urged Republican state lawmakers to reject New Orleans’ request to take on additional debt, saying the city must address its financial problems immediately.

In a post on X, formerly known as Twitter, Landry said that over the past 20 months, he and the Legislature have worked to establish fiscal stability through tax reform, reduced insurance costs and economic revitalization.

“It is imperative that the City of New Orleans address its financial matters promptly,” Landry wrote, calling on the Louisiana House Republican Delegation and Senate GOP to deny the city’s debt request.

This month Mayor-Elect Helena Moreno and other council members approved a resolution allowing the city to seek $125 million in short-term revenue bonds after a legislative auditor found the city has an estimated $160 million budget deficit, with overtime pay a major contributor.

“It’s a big amount, but it’s a bridge loan. Our tax receipts start to come in the beginning of the year. So it really is something that the city can pay back,” Moreno said.

If such a loan were to escape the legislators there will be serious implications for citizens of New Orleans. Obviously the loan will have to be repaid, and no one can be assured when or how it will be. Added to the loan principal, such a loan will carry hefty interest, fees, and closing costs. Further this approach doesn’t assure citizens that the City will be under pressure to undertake the restructuring of government spending that will prevent a reoccurrence, probably just the opposite.

Aside from these obvious issues, making such a loan reduces the capacity of the City to borrow for other strategic purposes such as for infrastructure and capital projects. Also such debt, when added to the financial mismanagement that led to it, will clobber the confidence of underwriters and purchasers of bonds and other debt instruments resulting in much higher borrowing costs.

I don’t know if the governor or legislators have any other ideas, but we as citizens must understand that panic borrowing will cost us all a lot, preventing us from seeing positive things in our city. Borrowing by government to address current expenses must be the last thing that should be done.

I hope that the legislators insist upon this maxim, and protect the interests of the citizens by insisting that good government practices take precedence over quick fixes to protect the status quo.