La. in budget crisis, but New Orleans financially efficient

Emily Branan

Wallet Hub, a website developed to be a financial resource, ranked New Orleans as the city with the most efficient public spending in the country.

The rankings focused on spending in the areas of parks and recreation, education and law

According to the methodology section of the article, Wallet Hub focused on the return of investment in these three areas.

To calculate the return on educational investment, Wallet Hub divided each city’s total standardized test scores in reading and math for grade 8 by its total amount of education spending per capita.

However, to adjust for differences in economic status among cities, the company altered the education spending levels to assume that all cities have an average poverty rate, rate of single-parent families, rate of households who speak a language other than English at home and median household income.

With this methodology, New Orleans ranked number one in public spending for education.

To rank cities’ efficiency in spending on law enforcement, they adjusted the police spending levels of each city based on its poverty rate, unemployment rate and household income, leading to New Orleans being ranked number 20 on the list.

In the overall ranking, New Orleans was number one on the list, followed by Miami and Philadelphia.

However, Douglas Harris, Schleider foundation chairman in public education at Tulane University, said he found the methodology behind the rankings problematic.

“For example, there is no good way to compare student tests at the city level across states, which means the rankings are mostly guesswork,” Harris said.

Harris said the data just does not exist to accurately rank cities
like this.

Diana Popa, communications manager for Wallet Hub, defended the methodology used for
these rankings.

“That’s why we put this report forward,” Popa said.

Andy Kopplin, deputy mayor of New Orleans, said he defines “efficient spending” as when the city spends the least to accomplish the most, so he believes New Orleans is efficiently spending public money.

“The budget in New Orleans is balanced and it’s stable and it’s structurally sound,” Kopplin said.

Kopplin said he cannot speak about the methodology Wallet Hub used for its ranking, but said he does believe that New Orleans has proved that it is able to spend money

“In New Orleans, we made a bunch of tough decisions, so the mayor often says, ‘balancing the budget is not complicated; it is hard, but it is not complicated.’ You can’t spend more than you take in,”
Kopplin said.

Kopplin said Mitch Landrieu inherited a $100 million gap between the money that was being spent and the money coming in when he became mayor.

“The police department was going to run out of money in October 2010. We need to make that money last until December, so we cut everything,” Kopplin said.

Kopplin said to start reducing this deficit, the city cut travel, hiring and furloughed every city employee, including the mayor.

According to Kopplin, after that initial budget issue, the city has had a structurally balanced budget, which Kopplin defined as having the ability to look ahead and understand how much money the city will need in the next few years.

Kopplin said he and Landrieu are hoping to prepare New Orleans and understand how much money is needed for different departments over the next few years.

“We have had a lot of job creation, which has allowed our budget and our expenditures to grow to meet the needs of a growing city,” Kopplin said.