New Orleans' Budget Still in 'Dire Situation', CAO Warns

City faces $55 million in bridge loan payments due soon as revenues lag projections

Published on Feb. 25, 2026

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New Orleans' Chief Administrative Officer Joe Giarrusso III warned the City Council's Budget Committee that the city's finances remain in a 'dire situation', with $55 million in payments coming due on a $125 million state bridge loan and budget overages worse than expected due to slower-than-projected sales and property tax revenues.

Why it matters

New Orleans has struggled with budget deficits in recent years, leading the city to take out a $125 million bridge loan from the state last year. The upcoming $55 million payment on that loan, combined with lower-than-expected tax revenues, threatens the city's ability to maintain essential services like trash pickup, blight remediation, and grass cutting.

The details

Giarrusso detailed efforts to fill the budget gaps, including seeking approval to sell $178 million in infrastructure bonds, auctioning off city vehicles, renegotiating health insurance, and collecting $1.1 million in Mardi Gras towing fees. He is also closely monitoring overtime and working with department heads. However, the city may need to ask the state for a second loan this summer to cover expenses.

  • The first $55 million payment on the $125 million state bridge loan is due on Monday, February 27, 2026.
  • The city is expecting to need to request a second loan or Revenue Anticipatory Note from the state this summer, shortly after the first loan is paid off.

The players

Joe Giarrusso III

New Orleans' Chief Administrative Officer who warned the City Council's Budget Committee about the city's dire financial situation.

Louisiana Bond Commission

The state entity that approved the $125 million bridge loan for New Orleans in late 2025.

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What they’re saying

“We want to make sure trash is picked up, blight is remediated, grass is being cut — those are the things we're trying to do. Without really significant moves by everybody, the city is at risk of running out of cash again.”

— Joe Giarrusso III, Chief Administrative Officer (fox8live.com)

“I know we are really sensitive to not wanting to increase burden on residents, but you can't expect to receive 2026 services on 2010 prices.”

— Joe Giarrusso III, Chief Administrative Officer (fox8live.com)

What’s next

The city's budget and a proposal to hire a comptroller to help manage New Orleans Police Department overtime are expected to be discussed again at the City Council's regular meeting on Thursday, February 26, 2026.

The takeaway

New Orleans' ongoing budget challenges underscore the difficult financial situation many cities face, with rising costs, lagging revenues, and the need to maintain essential services. The city's efforts to find creative solutions, like bond sales and renegotiating contracts, highlight the tough decisions local leaders must make to keep their municipalities solvent.