The New Orleans City Council is set to consider a major charter amendment in January that would impose strict limits on city spending, turning the city’s annual operating budget from a flexible guideline into a legally enforceable cap. The proposed change, introduced by Council President J.P. Morrell, aims to prevent departments from exceeding council-approved budgets without prior authorization.
The ordinance would amend the city’s Home Rule Charter to require tighter oversight and transparency. It comes in response to the city’s worsening fiscal condition, including a recent $125 million loan from the State Bond Commission secured to cover payroll and address a growing budget shortfall.
Under the proposal, city departments would be prohibited from reallocating or transferring funds if the changes risk exceeding the approved annual budget. Any deviation would require explicit council approval. The measure also mandates detailed monthly reports from the city’s chief administrative officer and director of finance, tracking spending trends and flagging potential overages early.
A third key provision bars the finance department from approving any spending that could push expenses above budgeted amounts, including purchase orders, vouchers, and checks.
Morrell emphasized the need for structural reform, telling the city’s Fiscal Review Committee in November that current practices allow overspending because there’s no firm requirement for a balanced budget. He described the current process as one where the budget functions as a “giant suggestion,” later reconciled by city administrators.
“If you had that charter amendment where the budget had to specifically define where each dollar is spent, it would be very easy for the council and a mayor to determine this is what we can afford,” Morrell said.
The measure is designed to prevent future fiscal crises like those experienced in 2025, when budget gaps forced drastic cuts and emergency borrowing. The council unanimously approved a $1.6 billion budget for 2026 in early December, including $150 million in cuts and nearly $75 million in newly tapped revenue.
If passed by the council, the charter amendment would appear on the November 3, 2026, ballot. If approved by voters, it would take effect on January 1, 2027.
