Warnings Ignored

In January 2025, the Cantrell administration formally warned the City Council that New Orleans was facing a “critical juncture.” Then Chief Administrative Officer Gilbert Montaño and Finance Director Romy Samuel sent a three-page letter to Council Budget Chair Joe Giarrusso detailing four urgent threats: the loss of federal funds, costly new legal settlements, unchecked recurring expenses, and weak revenue growth.

The memo made it plain: the city’s 2026 budget could not balance without deep cuts or new revenue. Yet the council did nothing.

Instead of fulfilling their legal duty under the City Charter—to oversee spending and ensure a balanced fiscal plan—the council turned its attention to gossip and scandal.

Gossip Over Governance

While payroll warnings stacked up and the Sewerage & Water Board’s liabilities ballooned, JP Morrell and Helena Moreno obsessed over the Pontalba apartment controversy, dissecting every rumor about the mayor’s alleged relationship with a security officer.

For weeks, the council fixated on a supposed romance, feeding nightly news cycles while the city’s finances bled. Would it not have been better for the mayor to manage the city’s affairs—even if she had a personal one—than for the council to neglect theirs?
While Moreno and Morrell performed for the cameras, the city’s fiscal foundation was collapsing beneath them.

Oliver Thomas Asked the Hard Questions

Councilman Oliver Thomas repeatedly raised concerns about the budget’s integrity. He questioned whether the administration’s projections matched reality and warned against relying on one-time revenue to mask long-term deficits.

Each time, he was assured by Gilbert Montaño and other officials that the city’s finances were “stable.”
Those assurances now ring hollow. The January letter from Montaño himself proves that City Hall knew better.

The council’s reliance on flawed data offered by Montaño shows a complete breakdown of accountability.
Rather than verify the numbers, the majority accepted them blindly—behaving like an unconcerned rubber stamp instead of an independent legislative body.

A Charter Breach

Article III, Section 3-101 of the New Orleans Home Rule Charter is clear:

“The Council shall adopt, monitor, and amend the annual operating budget to ensure a balanced fiscal plan.”

By any objective measure, that responsibility was ignored.
Yet the council constantly and regularly grilled the mayor over travel and personal behavior but never questioned inflated revenue projections or false fund balance assumptions.

The Cost of Political Theater

That negligence handed Governor Jeff Landry a golden opportunity. With his approval rating sinking to 39 percent, according to a JMC Analytics poll by John Couvillon, Landry needs a villain—and New Orleans is the easy target. He built his campaign on racial and cultural resentment toward the state’s biggest cities: New Orleans, Baton Rouge, and Shreveport.
Now, he gets to cast himself as the fiscal hero rescuing Louisiana from “irresponsible” local governments.
The same council members who weaponized scandal to gain power have handed him the perfect backdrop for political theater of his own.

Thin Ice

Though the Fiscal Review Committee meeting was canceled after the city withdrew its $125 million payroll loan request, the danger remains.
Under Louisiana Revised Statute 39:1351, the committee can reconvene with just 24 hours’ public notice if the Legislative Auditor or State Treasurer sees renewed fiscal distress. And make no mistake—the January letter proves the council knew about these problems months before the crisis became public.

If the city falters again, a Fiscal Administrator can be appointed by court order—seizing control over payroll, contracts, and spending until solvency is restored.

Next Steps

1. The Legislative Auditor will complete a full review of the city’s books.
2. The Treasurer continues to monitor liquidity, watching for missed payroll or late debt payments.
3. If either official flags renewed shortfalls, the Fiscal Review Committee can restart the takeover process in less than a day.

The window for correction is narrow—and closing fast.

The Inevitable Reckoning

The irony is bitter.
Morrell and Moreno played politics to secure their next elections—she as the incoming mayor, he as a returning At Large City Councilman. Now their political grandstanding may leave both of them governing under state supervision.

Moreno and Morrell wanted to change city governance. The charter provides for a strong mayor, who has resources and experts on staff. M&M wrestled control over the mayor’s ability to hire his or her own people. They also gave themselves the power to review most contracts. This dramatically disrupts how the city now works. Had the council devoted as much effort to balancing the budget as they did chasing rumors and political power, New Orleans wouldn’t be teetering on insolvency. The city warned them in January. They ignored it.

While Montaño ultimately misled the council, the council itself cannot escape blame. Under the charter, it is the council’s primary responsibility to oversee the administration’s use of city funds and to ensure a balanced budget. Yet instead of exercising meaningful oversight, many councilmembers accepted the administration’s assurances at face value, fixated on political theatrics rather than their fiduciary role. That abdication of duty removed the last protective barrier between the city’s finances and collapse.
Now the consequences are at their doorstep—and the governor they empowered through neglect is ready to make them his next headline.

New Orleans City Council budget crisis; Helena Moreno Pontalba affair; JP Morrell budget neglect; Oliver Thomas fiscal warning; Gilbert Montaño flawed data; Jeff Landry approval 39 percent; John Couvillon poll; Louisiana Fiscal Review Committee; New Orleans state takeover; Home Rule Charter duties; Gilbert Montaño January 2025 letter.