Orleans Parish School Board members voted Tuesday to accept a settlement agreement with the city of New Orleans that resolves a long-running funding dispute tied to a 2019 lawsuit the district filed against the city. The board approved the deal 6-1, with officials describing the agreement as a way to preserve school-related revenue and end practices they said routed money away from the district’s operations.
School board vice president Olin Parker said the agreement would change how the city collects taxes on the school board’s behalf. Under the settlement, the city will lower the sales-tax collection fee the city charges from 1.6% to 1.5% starting next year, and it will eliminate collection fees for property taxes. Parker also said the changes would save an estimated $150 per student annually.
District officials also said the settlement would address the board’s core contention about how some school money was handled. They argued that the city’s prior practices were illegal and included skimming funding meant for the school board to help cover pension obligations. Under the agreement, the city will stop that skimming practice, board members said.
The settlement also includes ongoing payments tied to Caesar’s Casino New Orleans. Parker said the city will provide Orleans Parish School Board $4 million every year in lease payments beginning in 2030 and continuing as long as the lease exists, noting that the money had been benefiting from a casino fund for decades before New Orleans City Council began moving the funds toward other initiatives.
Parker said the board plans to use the casino fund to support efforts that include addressing chronic absenteeism and funding for the Travis Hill School, which educates incarcerated children. He said protecting the fees “in perpetuity” is aimed at protecting students the district serves, adding: “The students are at the forefront of our minds,” and “Protection of those fees in perpetuity is protection for the most vulnerable students in our district.”
In addition to the tax and casino provisions, the settlement includes payments to the NOLA Public School district. The city will pay $6 million by the end of 2027, and beginning in 2027 it will pay $2 million annually over the next 15 years, totaling $36 million, according to board discussion of the deal. District officials said that money will go into the district’s fund balance and would not directly affect the flow of money into schools.
City leaders said the settlement reflects what the city can afford while meeting the school board’s needs. During a Tuesday press conference, Mayor Helena Moreno said the council, the mayor’s office and the school board were all aligned and that the deal would not fall through as it had last year, when Cantrell administration officials backed out of a prior multimillion-dollar settlement. Moreno said the agreement represents the city’s budget constraints and also gives the school board what it needs.
The settlement is still not final. It must go before a City Council vote, and it will not be finalized until it is signed by a judge. Five of the city’s seven council members attended the press conference announcing the deal, while board member KaTrina Chantelle Griffin was the only school board member who voted against accepting it.
Griffin said the settlement did not give the board everything owed through the original lawsuit, while board member Nolan Marshall said it was “great” but not perfect. Marshall said in particular that fees will not be collected for anything the city’s collections practices do not reflect anymore “going forward into perpetuity,” saying, “We will never be in this position again. That’s the agreement we have with the city. So that is a great deal.”
Sabrina Pence, CEO of FirstLine Schools, which operates four charter schools in the city, said the settlement will protect funding for children for “a long, long time.” She said charter school groups that had tried to intervene earlier in the case, including KIPP New Orleans, ReNew Schools and the Louisiana Association of Public Charter Schools, sought a role in negotiations that ultimately did not materialize.