New Orleans to lay off 3,000 city workers about half the workforce because of financial constraints caused by Hurricane Katrina, Mayor Ray Nagin said Tuesday.
Citing a loss of city revenue after the storm, Nagin said the city for weeks had "searched high and low" for the necessary payroll funds, requesting help from the state and federal governments.
"We've talked to local banks and other financial institutions, and we are just not able to put together the financing necessary to continue to maintain our city hall staffing at its current levels," he said.
Nagin said it was "with great sadness" that New Orleans was "unable to hold on to some of our dedicated city workers."
He said the city hopes to save from $5 million to $8 million on a current monthly payroll of $20 million after the layoffs, which begin taking effect Saturday, reports CNN.
According to The New York Times Nagin made the announcement at a news conference just one day after the governor of Louisiana, Kathleen Babineaux Blanco, met with the heads of parishes to assess how much money would be needed to meet payrolls in areas where the tax base has been devastated.
Blanco said yesterday that she wanted Congress or President Bush to change the Stafford Disaster Relief and Emergency Assistance Act regulations to allow funds to pay regular salaries and not just emergency-related overtime of public employees.
Bush said at a news conference on Tuesday that Congress had important work to do responding to the destruction of Hurricanes Katrina and Rita.
"I've also made it clear we must do so in a fiscally responsible way," he said. "Congress needs to pay for as much of the hurricane relief as possible by cutting spending. I'll work with members of Congress to identify offsets and to free up money for the reconstruction efforts."
In addition to the New Orleans layoffs, which Mr. Nagin said were an initial cut, the mayor said he was also asking the state to offer bonds to finance some of the city's debt. "I'm hoping those two actions will give us flexibility," he said.
The mayor said the city had checked with federal financial sources, state sources, local banks and other financial institutions but was unable to maintain staffing at current levels.