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" La. lawmakers tackling costly hurricane relief issues budget crisis in special session"

From this:

Louisiana lawmakers have just over two weeks to chart their hurricane-ravaged state's future, from rewriting building codes to weighing tax breaks to changing how employment benefits are calculated, and then answering the big question: how to pay for it all.
Gov. Kathleen Blanco called the special session starting Sunday for the Legislature to address 77 hurricane-related issues. It has to end by Nov. 22, two days before Thanksgiving.
"Frankly, I think it's too much to do in 16 days, but we'll do our best," Democratic Sen. Butch Gautreaux said.
Looming over the session is the already $971 million hole in the state's $18.7 billion budget for the 2005-06 fiscal year that run through June 30.
One of the tasks awaiting lawmakers is figuring out how to calculate property taxes for homeowners whose properties were damaged or washed away by hurricanes Katrina or Rita.
Property tax bills are normally mailed at the end of the year, but some lawmakers want to postpone the deadline for taxes on those homes.
Doing that, though, would mean delaying money that schools, cities and other local governments use to provide services such as garbage collection, transportation and education.
"This is not a very easy issue," said Republican Sen. Tom Schedler. "None of it is going to be pretty, and there is no right or wrong answer."

Nagin: NO not bankrupt, has $204 million shortfall, needs federal loan

From New Orleans mayor seeks aid, loans for shortfall:

New Orleans is seeking federal aid and new loans to ride out a $204 million budget shortfall caused by the expected loss of all property tax revenue in the short term, the city's mayor said on Thursday.
"If we project out based on maintaining essential personnel and essential services throughout the year, the amount of money we're borrowing still leaves a gap of about $204 million," Nagin told Reuters in an interview.
"We're not bankrupt. We've been out of cash. We have a liquidity problem. But we have been careful to make sure that we continue to pay our debt service, which would cause all sorts of problems," Nagin said...
New Orleans has over $530 million in general obligation bonds outstanding and $155 million in pension bonds, according to Standard & Poor's Ratings Services. Related entities such as the New Orleans Exhibition Hall Authority and the New Orleans Sewerage and Water Board also have outstanding debt.
Nagin said that although aid had been slow in coming, the city was in the process of applying for $120 million in federal borrowing under the Community Disaster Loan program.
Forced to try to woo major businesses back to the city, Nagin said executives have told him they needed to see a strengthened levee system, better schools and streamlined government in order to invest again.
"They don't want to see the bloated government that we had in the past," said Nagin, a former cable television executive who faces a possible primary election in February.

"Bloated" is one way to put it I guess.

Nearly $1 billion in state tax income lost since Katrina

Louisiana's budget deficit got an official number today -- nearly 971 million dollars lost in state tax income that the governor and lawmakers will have to slash from state spending in the remaining eight months of the budget year.
Economists warn the budget problems could worsen as they get more concrete details of the lost sales, income, gambling and business taxes from the back-to-back blows of Hurricanes Katrina and Rita.
And the figure formally recognized by the state's revenue estimating panel doesn't include the dollars that individual state agencies will lose as fees paid directly to them for licenses and penalties or the federal matching dollars that will be lost because state agencies won't be able to put up their part of the cash.
Gov. Kathleen Blanco's top budget adviser, Jerry Luke LeBlanc, says the governor will make a series of cuts to state departments before the Legislature convenes in a special session November 6...

She can cut $300 million, but hasn't said what it will be yet.
(source)

Nagin: NO to be larger; only enough cash til March

source

New Orleans Mayor Ray Nagin believes that the city will be larger and much safer in as little as five years.
Nagin made the proclamation in front of the City Council Thursday as he projected his budget for the upcoming year.
While anticipating a much smaller city initially, Nagin believes the opportunity to rebuild New Orleans will result in eventual growth...
However, Nagin realizes hard times will precede good times and he said next year's budget will be approximately $155 million less than this year's. He attributes the shortfalls to anticipated trouble collecting property taxes and a large decline in tourism, probably to 20 percent of its pre-Katrina level for next year.
And he anticipates that the cash they currently have can last them only through March, though he is optimistic that loans and federal grants will bridge the gap...
... Council members suggested that the city also become more diversified since tourism is expected to be only a fraction of what it once was for some time to come.

Nagin defends gaming; "I see a state in crisis"; "not feeling very regional right now"; thousands still missing

From this:

A frustrated New Orleans Mayor Ray Nagin warned Thursday that it would be in the state's best interest to help the Crescent City jump-start its Hurricane Katrina-riddled economy, saying the impact on the state -- if nothing is done -- will pale in comparison to the layoffs the city recently announced.
"You think 3,000 layoffs in New Orleans is a big deal. Just wait,'' Nagin, his sleeves rolled up, said during an evening meeting with The Advocate's editorial board. "I see a state in crisis.''
The mayor pointed out during the Baton Rouge meeting that New Orleans accounts for 35 percent of the state budget.
"This is not chump change,'' he said. "We're going to have to sell the financial realities of what has happened to this state. Four-day work weeks is not going to do it.''
Nagin, who spent a second straight day Thursday visiting New Orleanians in evacuation shelters, including those in Baton Rouge, Lafayette and other parts of the state, expressed frustration over inaction on the state's part and what he perceives as indifference to the city's post-Katrina plight...
...Nagin, asked if the city is considering filing for bankruptcy, said his administration is in the process of borrowing $50 million from Chase Bank and is looking for a consortium of banks to lend the city another $50 million to $100 million...
...The mayor said his much-criticized proposal last week to create a casino district in downtown New Orleans -- what he referred to Thursday as the "hype and glitter factor,'' would be a way to breath life into the ailing city economy...
...The devastated Lower 9th Ward, what he called "the most vulnerable area of the city,'' could face "mass demolitions'' if the U.S. Army Corps of Engineers cannot give the city and residents the "comfort'' that it can be protected from future levee breaks along the Industrial Canal. The Lower 9th contains the highest concentration of blighted property in the city, he said, a legacy of Hurricane Betsy. If the Lower 9th is rebuilt, it likely will contain of mix of raised residences, apartments and condominiums, and industry.
His relationships with Blanco and Jefferson Parish President Aaron Broussard are less than cozy.
"I've been trying to work with the governor. We have very different styles. I'm really at a loss for what else to do,'' the mayor said.
"There are some really hard feelings right now,'' he said of his feelings toward Broussard. Shortly after Katrina struck, New Orleans residents who had fled to the Ernest N. Morial Convention Center tried to "walk to freedom'' by crossing the Crescent City Connection on foot to make it out of the flooded city, but law enforcement officials in Gretna -- which is in Jefferson Parish -- met them with guns and "attack dogs,'' he said.
"And they want me to talk about regionalism. I'm not feeling very regional right now,'' Nagin said.
His idea to create a charter school system of 20 schools that he, rather than the Orleans Parish School Board, would control was prompted by the extreme pressure that the board is under to open schools on the city's east bank...
Even with 60 percent of the 1,061 identified hurricane deaths being from New Orleans, there are still 4,000 to 7,000 missing New Orleanians...

Economist: half of NO's small businesses will disappear

The chancellor of the University of New Orleans, economist Tim Ryan, says he would not be surprised if New Orleans area business failures caused by Hurricane Katrina run much higher than the national average for disaster-related failures of 25 percent.
There were 115,000 businesses in NO in 2002, most small companies or one-man operations. If he's right, 60,000 of those will not come back. However, he thinks that new companies will be created to deal with the crisis.

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"Storm-related jobless claims mount"

From this:

The number of people out of work because of Hurricane Katrina has reached 279,000, and many more job losses are expected because of Hurricane Rita. The lost jobs, coupled with surging energy prices, are expected to deliver a sharp blow to overall economic growth in the second half of this year. Also of concern is the possibility that any further unexpected spikes in energy prices could prolong the economic weakness.
The Commerce Department reported today that the economy was growing at a solid 3.3 percent annual rate in the April-June period, but that rate is sure to be weaker in the just-concluding July-September quarter.
"The problem is the combined effects of the disruptions from Katrina and Rita, plus the ripple effects in the economy from higher energy prices," said Nariman Behravesh, chief economist at Global Insight, a consulting firm in Lexington, Mass...

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JPod: W's Biggest Gamble

John Podhoretz:

Once again, as it has at every turn in his presidency, crisis has brought out the high-stakes gambler in George W. Bush. He believes in bold action, and in the extraordinarily risky speech he gave last night, bold action is exactly what he promised the American people...
...Unlike most conservatives, he believes that the power and depth of the federal government can be marshaled to improve the lives of people here and abroad by making use of, rather than husbanding, its resources...
Still, in ignoring the small-government sensitivities of conservatives in favor of a grand set of propoals that, had Bill Clinton delivered it, would be receiving hosannas today from The New York Times and The Washington Post, Bush may have done something politically catastrophic to his own presidency....

At that point, the excerpt runs out, and you need to use a free account to the NY Post to access it. Since none of the bugmenot accounts worked, I'm not going to bother as much as I'd like to learn exactly what JPod is referring to.

Nagin: New Orleans now bankrupt

I think he misunderstands what "bankrupt" means. He seems to think it means just not having cash. Despite their bond ratings being lowered, I'm sure New Orleans can raise some money from somewhere.

[Nagin] said the city spent its last available cash last week on city employee payroll and was seeking bank loans, federal assistance and other means of financing to continue paying its bills and staff, the New Orleans Times Picayune reported Tuesday.
However, Nagin was emphatic state and federal officials would not railroad through city reconstruction until it had passed city muster.
"I don't want anybody outside of New Orleans planning nothing as it relates to how we're going to rebuild this city without us signing off on it," Nagin said...

In other words: don't try to cut me out of the rebuilding.

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