Mayor A.J. Holloway told a luncheon audience today that the city needs to hold the line on discretionary spending and maintain a cash reserve since the city’s property insurance coverage is a fraction of what it was before Hurricane Katrina.
Holloway, speaking to a luncheon of the Harrison County Republican Club, said he was worried that in budget hearings this week, members of the City Council appeared anxious to restore funding to a host of the more than 70 agencies requesting money from the city. Such a move, he said, would diminish the city’s financial reserves, which are designed to offset any reduction in revenue.
The mayor had presented the council a budget last week that proposed $41 million in capital projects, a 2.5 percent employee pay increase, and no increase in the city property tax rate.
In opening the door to restoring funding for other agencies, Holloway said, council members may now face a crowd of agencies, civic groups, museums and others seeking funding when budget hearings resume Tuesday at 10 a.m. at City Hall.
“I realize that government has an obligation to its citizens, particularly the less fortunate, but government cannot do it all,” Holloway said, noting that the city’s funding had grown from $100,000 a year to a million a year to as many as 70 projects, such as museums, non-profit agencies, civic groups and special events.
The mayor, who had frozen all capital projects and discretionary funding after Hurricane Katrina, added that the city has reduced its insurance coverage by $21 million since the storm and has no business interruption insurance. Said Holloway: “Any storm of any consequence could be even more financially catastrophic to us than Katrina.”
“If we were to dole out that money as we have done in the past, we’d be leaving our city – that’s you and your neighbors – in a precarious situation. Our economy is far from restored. We need to be prudent.”
The luncheon audience, which included Councilmen Tom Wall and David Fayard, gave Holloway standing ovations before and after his remarks.
Related info online
–To see a history showing the growth of discretionary funding, click here.
–To see the speaking points from the mayor’s presentation today, click here.
–To see background on Holloway’s budget proposal, click here.
–To see the city’s economic indicators covering 15 years and 15 months, click here.