Madden presses Discon to back up claim city is overspending in FY2027 budget; Discon balks
Zuckerman asks, ‘What should those fund balances be?’ as projections show restricted funds could grow to $45 million in five years despite regular spending
MANDEVILLE — What began Thursday evening as the second in a series of largely technical hearings on Mandeville’s proposed FY2027 budget ended in a heated confrontation over whether the city is spending too much — and opened a potentially much larger debate over whether taxpayers should continue pouring money into restricted funds that could accumulate an estimated $45 million over the next five years.
The Aug. 13 hearing — the second for FY2027 — produced two distinct financial debates that eventually collided: Councilman-at-Large Scott Discon’s assertion that the city is overspending despite the administration presenting its first structurally balanced budget in years, and Councilman-at-Large Jason Zuckerman’s insistence that the city determine how much money it actually needs to retain in two rapidly growing restricted sales-tax funds.
Budget Hearing #1: FY2027 budget hearings open with first structurally balanced operating budget in years
Zuckerman asks, how much is enough in restricted funds?
The latter question, Zuckerman argued, is essentially the same one the council recently answered for the General Fund.
After months of debate, the council this summer established a 20% minimum General Fund reserve and separately adopted a 30% to 40% target range. Discon cast the lone dissenting vote on both measures.
Zuckerman said Thursday that the city now needs to ask the same fundamental question about its Street Construction Fund and Special Sales Tax Fund:
How much is enough?
The issue arose as Finance Director Jessica Farno reviewed how Mandeville’s 2.5% local sales tax is divided and presented historical growth in several city funds.
From 2020 to 2025, the Street Construction Fund increased by nearly $6 million despite almost $10 million in capital expenditures. The District 3 Special Sales Tax Fund grew by approximately $10.7 million despite $4.6 million in capital spending, while the Special Sales Tax Fund increased approximately $1.5 million despite $14.3 million in expenditures. Over the same period, the General Fund declined approximately $8.4 million while absorbing $13.2 million in capital outlay.
Zuckerman pushed for those historical trends to be projected forward, arguing that the city cannot examine a five-year projection showing pressure on the General Fund without simultaneously examining how much money could accumulate elsewhere.
Based on the preliminary projection discussed Thursday, the Street Construction Fund and Special Sales Tax Fund could together reach approximately $45 million in five years.
Zuckerman repeatedly emphasized that he was excluding the District 3 Special Sales Tax Fund from that figure because Mandeville does not control the dedication of those parish-generated revenues.
“If we’re gonna talk about that, we also gotta be talking about over those next five years, we’re gonna grow those restricted funds,” Zuckerman said. “If we keep doing the same thing that we’ve been doing, simply, the same level of spending and the same revenue dedicated to those pockets, while we’re reducing the General Fund, we’re growing those restricted funds.”
The discussion is particularly timely because the authorization for a 1% sales tax approved in 1986 expires Dec. 31, 2029. Half of that tax may be used for any lawful governmental purpose, while the other half is dedicated to water, sewer, streets, drainage and flood protection.
A separate half-cent tax approved in 2001 and dedicated to streets, sidewalks, bike paths, existing bridges and roadside drainage was renewed by voters in 2021 and runs through July 1, 2031.
Zuckerman said the approaching 2029 expiration gives the city an opportunity to reconsider whether allocations established decades ago still reflect its needs.
“We can either, A, go back to the voters and say, ‘Let’s keep putting money in this fund. Let’s keep taxing you, and let’s watch these fund balances grow, and we can’t spend it,’ or we can put it on the ballot and we can say, ‘Let us spend it differently because things are different than they were 25 years ago,’” Zuckerman said.
There is another option, he added: Let the tax expire.
“That’s not the purpose of government, to keep collecting taxpayers’ money to grow a huge balance that you’re not gonna spend,” Zuckerman said. “I’d rather reduce taxes.”
District III Councilwoman Jill Lane responded by focusing largely on the District 3 Special Sales Tax Fund, despite Zuckerman having specifically excluded that fund from the balances he was questioning. She warned that emphasizing growing balances could make voters reluctant to renew taxes and noted that District 3 revenue is dedicated to costly road and drainage projects.
Discon had repeatedly pushed back at previous meetings on Zuckerman’s suggestion that the city consider asking voters to rededicate some restricted funds. Lane now appeared to add another skeptical voice to that discussion.
“And if as we continue to say stuff like, ‘We’re just, this fund is growing and growing and growing,’” Lane said. “Well, the voters could be like, ‘Well, then we don’t need it anymore.’”
Lane suggested the city instead look for additional eligible uses for District 3 money, including expenses currently paid from the General Fund. She asked, for example, whether some police salaries could potentially qualify based on where officers work.
Public Works Director Keith LaGrange added that future annexation of portions of the city’s growth management area could bring infrastructure with it that Mandeville would have to maintain. He cited an earlier examination of taking over a street that would have required several million dollars to bring to city standards.
“Maybe I didn’t make my point very clearly,” Zuckerman said later. “When I talked about the growth in those restricted funds, I specifically was not talking about the District 3 sales tax fund.”
Zuckerman also told Mandeville Daily that he believes the concern over future street liabilities overstates the city’s circumstances.
Annexations into Mandeville are relatively rare, he said, while many of the city’s major thoroughfares are maintained or funded at the state or parish level. That leaves the city primarily responsible for neighborhood streets, where Mandeville already has an ongoing program of maintenance and capital improvements.
His larger point, Zuckerman said, is that the projection already assumes the city continues spending on streets at approximately the rate it has historically — yet the restricted balances still grow to approximately $45 million.
And if some council members are not willing to consider changing the dedications, Zuckerman said, he at least wants them to confront what the projections are showing.
During Thursday’s hearing, Zuckerman said he was not arguing that the city necessarily has too much money in either fund today. Rather, he wants the council to establish what an appropriate reserve actually is instead of allowing the balance to grow indefinitely simply because the tax dedication already exists.
“What should those fund balances be moving forward?” Zuckerman asked. “I’m not comfortable with we made a decision 25 years ago or 20 years ago to put this much every year into a fund, and 20 years later we just say we can never, ever, ever, ever adjust that or relook at it.”
Lane’s warning that repeatedly calling attention to the growing restricted-fund balances could jeopardize future voter support drew a pointed response from Zuckerman, who questioned why openly discussing how large those funds should become appeared to be off limits.
“I’m just asking what should those balances be in five years? And I don’t understand why we can’t talk about that,” Zuckerman said. “Because we’re collecting tax money, and we’re projecting right there [on presentation screens in the council chambers] that we’re gonna be sitting on that tax money and not spending it.”
Spending accusation sparks heated exchange
The philosophical debate over restricted funds soon gave way to a considerably more contentious exchange over the budget immediately before the council.
Discon said some residents believe the city is overspending and argued that before officials discuss reallocating dedicated tax revenue, the city should demonstrate that it is serious about controlling expenses.
“We’re overspending,” Discon said. “We should be saving some money somewhere.”
Discon also expressed disbelief in the administration’s five-year General Fund forecast.
“I looked at it last night when I got in bed. I was like, ‘God, this is the most beautiful five-year forecast,’” Discon said. “It just looks too unbelievable to be real.”
Mayor Clay Madden challenged him directly.
Madden noted that the administration has presented a structurally balanced FY2027 operating budget, with recurring revenues exceeding recurring expenses by approximately $200,000. He said he, Farno and department directors had gone through the spending plan “with a fine-tooth comb” to reduce expenses before it reached the council.
If Discon believed the city was still overspending, Madden said, he wanted him to identify where.
“I need from you, Councilman Discon, the areas that you feel like we’re overspending. … Not from a text message, not from the people you’re gonna go talk to between the meetings.”
Discon initially characterized his assertion as a general statement and pointed to his opposition to the previous year’s budget.
Madden continued pressing.
“I’m not talking about the projections,” Madden said. “I’m talking about the budget that we have before us right now. If you think that we’re overspending, then I need you to state in a meeting where you think we’re overspending and where we need to dial it back.”
Discon acknowledged that he did not yet have specific cuts to identify, saying Thursday was only the second hearing and that three remained.
“You’ll get it within the next, I guess we have three meetings, so I still have time to put all that together,” Discon said.
He maintained that his concern stems partly from the five-year forecast and his belief that the General Fund will decline more quickly than projected.
“This year’s forecast is completely different than last year’s forecast, but four of the years are still in it that were there last year,” Discon said. “So I’m wondering why all of a sudden is this forecast looking so bright? Is it just because we’re adding a Trader Joe’s every year?”
Zuckerman then joined Madden in challenging Discon’s assertion.
“If I was gonna come to a budget hearing and claim that we’re overspending and the budget is overspent, and this budget is overspending, and that the forecast is inaccurate, I would certainly have some details with me to do it,” Zuckerman said.
Discon objected to the increasingly pointed criticism, saying Madden and Zuckerman were “coming after” him. He continued to push back.
“I still think that there’s some overspending in this thing,” Discon said. “We don’t have the time right now for me to go into that, but I’m putting together a list of what I think we should be doing, and that will come to the next meeting.”
The exchange echoed Discon’s position during last year’s budget process. Discon cast the lone vote against the FY2026 operating budget, but when the council considered specific spending reductions, those amendments were offered by District II Councilman Kevin Vogeltanz. Discon instead sought to postpone the final vote and have the administration return with proposed cuts, a motion that died for lack of a second.
Under Mandeville’s form of government, the mayor proposes the annual budget, but the City Council holds the legislative authority to amend and ultimately adopt it — leaving council members to decide which expenditures, if any, should be removed before passage.
District I Councilwoman Cynthia Strong-Thompson then moved to adjourn, bringing the increasingly acrimonious exchange to an end.
The council has three budget hearings remaining, with the next scheduled Wednesday.
Moving forward
Discon has now committed publicly to identify the spending he believes should be reduced.
At the same time, Zuckerman has made clear that he intends to continue asking a different question throughout the budget process — not simply whether Mandeville has enough money, but whether taxpayers are being asked to provide more than the city can reasonably use when tens of millions of dollars may accumulate in restricted accounts.
The council will continue its review during three additional FY2027 budget hearings this month, with the next scheduled for 6 p.m. Wednesday, Aug. 19.
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