The Orleans Parish School Board voted on Tuesday to accept an agreement on a funding battle that district officials said funneled around $135 million away from schools and towards municipal expenses, settling a filed against the city of New Orleans by the district.
The board voted 6-1 to accept the deal. Under the settlement, the city will lower collection fees for sales taxes and eliminate them for property taxes, practices that district lawyers argued are illegal. It will also stop the practice of the city skimming funding meant for the school board to fund pension obligations.
Beginning next year, the city will lower the fee it charges to collect sales taxes on OPSB鈥檚 behalf from 1.6% to 1.5%, saving an estimated $150 per student every year, according to board vice president Olin Parker. OPSB will also receive $4 million every year in lease payments from starting in 2030 and continuing as long as the lease exists, which had benefited from the Casino Fund for decades until the New Orleans City Council started the money towards other initiatives.
Parker said the casino fund will help bolster initiatives to address chronic absenteeism and funding for the Travis Hill School, which educates incarcerated children.
鈥淭he students are at the forefront of our minds,鈥� Parker said. 鈥淧rotection of those fees in perpetuity is protection for the most vulnerable students in our district.鈥�
Additionally, the city will pay the NOLA Public School district $6 million by the end of 2027, and beginning in 2027, will pay $2 million annually over the next 15 years, totaling $36 million. That money will go into the district鈥檚 fund balance, and won鈥檛 directly affect the money flowing into schools. It will replenish some of the money the to correct a financial miscalculation that led to a $50 million deficit in 2024.
For most board members, the settlement satisfactorily addressed major funding issues.
鈥淭he city is broke 鈥� they鈥檙e having their own issues to deal with,鈥� said school board president Leila Eames. 鈥淟ets be grateful, lets be joyful, and lets celebrate.鈥�
The city has been working on righting an estimated $220 million deficit since Mayor Helena Moreno took office in January. As a city council member, Moreno supported a previous, multimillion-dollar settlement between the city and OPSB, which was negotiated by the council and then-Mayor LaToya Cantrell鈥檚 top deputy. Cantrell, however, later . That decision drew the ire of the City Council, which joined the lawsuit with OPSB against the city.
During a press conference Tuesday afternoon, Moreno affirmed that the council, mayor鈥檚 office and school board were all on the same page, and that the deal wouldn鈥檛 fall through as it had last year.
鈥淲e thought everything had been worked out and settled,鈥� Moreno said, referring to the deal negotiated during the Cantrell administration. 鈥淯nfortunately, all of that pretty much fell apart. But we all vowed that we would be back.鈥�
Moreno said the settlement represents what the city is able to afford, given their budget constraints, while also giving the school board what it needs.
The settlement must still go before a City Council vote, and it won鈥檛 be finalized until it is signed by a judge. Five of the city鈥檚 seven councilmembers were present at the press conference to announce the successful deal.
OPSB member KaTrina Chantelle Griffin, the only person on the school board to vote against the deal on Tuesday, said that the settlement didn鈥檛 give the school board all of what was owed to it through the original lawsuit. Board member Nolan Marshall said the settlement was great, but not perfect.
鈥淔ees will not be collected for anything that鈥檚 not codified anymore, period, going forward into perpetuity,鈥� Marshall said. 鈥淲e will never be in this position again. That鈥檚 the agreement we have with the city. So that is a great deal.鈥�
Earlier this year, the administration offered the district a deal that would do away with property taxes but raise sales taxes to 7.5 %, .
The district has blamed some of its financial issues on the collection fees, which leaders say have routed money away from public schools. Compounded with declining enrollment, which is directly tied to school funding, the district has found itself in a position where it .
Sabrina Pence, CEO of FirstLine Schools, which operates four charter schools in the city said the settlement will protect funding for children for 鈥渁 long, long time.鈥� FirstLine, along with KIPP New Orleans and ReNew Schools and the Louisiana Association of Public Charter Schools, tried in January to in the lawsuit to be a part of negotiations, which ultimately never came to fruition.
The Mayor鈥檚 office was holding a press conference to celebrate the successful deal Tuesday afternoon, but the City Council won鈥檛 vote on it until Thursday.
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