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Analysis: Balancing Lafayette’s city budget is going to hurt

Illustration by Peter DeHart

Entering 2020, the city of Lafayette’s general fund was projected to run a deficit of $18 million this year and more than $20 million over the next two. Now that gap is widening. The economic shutdown is projected to reduce the city’s revenues by $10 million this year alone. And revenues could keep dropping over the next couple of years as Lafayette’s economy slogs through yet another recovery. In a couple of months, Lafayette Consolidated Government will begin putting together a budget for the next fiscal year, and it’ll be doing so with even less money than was projected just a couple of months ago. 

Without new revenue from new taxes or an utterly miraculous economic turnaround — which seems less likely every day that oil prices languish — serious budget cuts are inevitable. Mayor-President Josh Guillory has made clear at recent press conferences that everything is on the table, calling the pandemic a time to exercise “fiscal discipline.” 

What that means is finding places to cut outside of what he says are the three essential functions of government: public safety, infrastructure and the economy. 

The question isn’t if budget cuts are happening, rather when they happen, what’s going to get cut and by how much? Guillory has hinted that he wants to work from a zero-based budget, meaning starting with how much you have and allocating at the bottom of the pyramid of needs first. If anything is left when the money runs out, tough. 

The city’s roughly $100 million general fund is essentially an operating account for anything from paying salaries to operating expenses to capital projects. The reality is the operating deficit can’t be closed just by zeroing out funding for cultural and community activities, which is the stuff budget hawks usually call government waste. And making those cuts will come with deep losses to Lafayette’s quality of life. 

To prove this point, let’s look at all of the funding the city pays for “nonessential” culture and community activities:

ActivityAmount
Science Museum$1,180,303
Golf Courses$645,047
Heymann Center$526,999
International Trade$369,136
Cajundome$338,744
Senior Center$322,134
Acadiana Center for the Arts$315,360
External Grants$299,439
Total$3,997,162

Even if we cut all this from the budget, it would only offset about $4 million of the more than $10 million annual operating deficits. And, make no mistake, zeroing out any of these subsidies could cripple or even kill these community and cultural assets.

So if there aren’t enough expenses to cut here to balance the budget, what else could be cut?

ActivityAmount
Parks and Recreation$3,371,920
Public Transportation$2,837,842
Acadiana Open Channel$396,357
Total$6,606,119

These are only other major expenses of the city general fund that fiscal conservatives historically target when facing a time of extreme belt tightening. Continuing our thought experiment, you could shut these less essential subsidies down completely and make some headway. But doing that would radically reduce services people rely on. 

It would mean worse parks with fewer recreation programming for kids. It would mean fewer buses with fewer stops and fewer routes. (Worth noting that Lafayette Transit System did receive a $7 million grant through the federal stimulus.) It would mean less access to council meetings and other public events AOC broadcasts, not to mention the access and education it provides to everyone in our community who wants to learn how to create media of their own.

I personally consider these all to be essential public services that need more funding, not less, but they’re really all that’s left before we get to core services, literally the things needed to maintain order and commerce:

ActivityAmount
Local Government Operations$34,625,267
Police$32,731,323
Fire$23,780,646
Total$91,137,236

This is where the bulk of the city’s general fund dollars go. When you chart it out, the stuff that budget hawks would say is “fluff” is a small proportion of the overall general fund budget.

Trying to cut any public safety budgets would be problematic the year after giving them $6.4 million in pay raises that were needed to retain and attract a qualified workforce. 

While “local government operations” may sound generic, it encompasses a lot of really important functions. Like the city court, city attorney and city marshal; LCG’s finance, legal and IT departments; and the mayor-president and council offices. 

Even if there are significant savings to be realized in these areas, there are all sorts of needs in other parts of local government that are chronically underfunded, like the city’s $40 million backlog in roadwork or Downtown’s ill-maintained infrastructure. So there’s almost certainly no easy way to trim millions from this part of the budget either.

And let’s not gloss over the fact that cutting millions of dollars from the city general fund could cost some number of people their jobs at a time of already-record unemployment. Guillory has acknowledged this could mean furloughs for government employees. 

Even if the local economy doesn’t fall into a multi-year recession, these budget reductions are going to cut wide and deep. And even if the federal government steps in with a coronavirus bailout, steep cuts will likely still be needed to catch up with recurring deficits. Remember, before the coronavirus recession, Lafayette was running millions over budget. 

The challenges were already great before COVID-19 arrived. Now they’re even worse. The question our community will need to answer next is what we’re willing to sacrifice in the months and years to come.

About the Author

Geoff Daily created FiberCorps and helped launch the Lafayette General Foundation. He now works as a launch strategist.

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