The Louisiana Legislative Auditor presented a budget-deficit analysis to the New Orleans City Council budget committee on Oct. 15 and estimated the consolidated general fund will end 2025 with roughly a $160 million spending deficit and an expected year-end fund balance near $46 million.

Mike Waguespack, presenting for the auditor's office, said the auditor used internal unaudited financial statements and city-provided information. He reported consolidated general fund revenues are projected at about $768 million for 2025 while expenditures are projected at roughly $928 million, producing an anticipated deficit of about $160 million for the year.

Why it matters: Waguespack told the committee that much of the remaining year-end fund balance will be restricted as the city's rainy-day or savings fund (about $37 million), leaving less than $10 million of discretionary cushion on a near-$1 billion budget. The auditor and council budget chair said that level of reserves is thin for a hurricane-prone city.

What the auditor recommended

- Amend the current-year budget as soon as possible and repeatedly as necessary to reflect updated revenue and expenditure realities.

- Provide realistic revenue estimates and revise them throughout the year instead of relying on optimistic event-related projections.

- Institute monthly, line-item budget-to-actual reporting presented in a format that shows beginning fund balance, revenues, expenditures, and projected ending fund balance; those reports should be timely and readable for council oversight.

- Improve monitoring and controls around overtime and discretionary spending; the auditor's analysis identified substantial overtime growth — the 2025 overtime budget was $57,500 but year-to-date spending through Sept. 29 was roughly $40 million, driven by public-safety overtime across departments.

Council and administration exchanges

The presentation prompted pointed exchanges between council members and administration officials about when council saw internal budget information, whether overtime was included in the administration's proposed budget, and whether the administration brought requests for midyear amendments when spending exceeded budgeted amounts. The city's finance director, Romy Samuel, said the finance office provides monthly reports and attends the budget committee; she acknowledged overtime was not sufficiently visible in earlier formats and said the office will work with council on improved formats.

Ending: The auditor's office said it will provide the committee a detailed exhibit showing line-by-line revenues and expenditures and offered to coordinate a preferred reporting format. Council members and administration officials agreed to adopt more timely monthly reporting and to work on options for revenue generation and midyear adjustments.