New Orleans plans to lay off about half its workers

NEW ORLEANS – Mayor Ray Nagin said Tuesday the city is laying off as many as 3,000 employees – about half its work force – because of the financial damage inflicted on New Orleans by Hurricane Katrina.

Nagin announced with “great sadness” that he has been unable to find the money to keep the workers on the payroll.

He said only nonessential workers will be laid off, and that no firefighters or police will be among those let go.

“I wish I didn’t have to do this. I wish we had the money, the resources to keep these people,” Nagin said. “The problem we have is we have no revenue streams.”

Nagin described the layoffs as “pretty permanent” and said the city will work with the Federal Emergency Management Agency to notify municipal employees who fled the city in the aftermath of Katrina, which struck Aug. 29.

The mayor said the move will save about $5 million to $8 million of the city’s monthly payroll of $20 million. The layoffs will take place over the next two weeks.

“We talked to local banks and other financial institutions, and we are just not able to put together the financing necessary to continue to maintain City Hall’s staffing at current levels,” the mayor said.

St. Bernard Parish can pay its workers for another month before its coffers run dry and those trying to reconstruct water, sewage and other services are laid off.

“We have enough funds to last us about two more paydays – that’s 30 days – and then we’ll have to let our people go,” Parish President Henry Rodriguez said.

Local and state officials are looking to the federal government for help, but it’s unclear whether federal officials will offer a bailout or parish officials will start handing out pink slips.

Meanwhile, former President Clinton met with dozens of New Orleans-area evacuees at a shelter in Baton Rouge’s convention center. And officials ended their door-to-door sweep for corpses in Louisiana with the death toll Tuesday at 972. Mississippi’s Katrina death toll was 221.