These threads should help people to understand the situation. Nutty, you are entitled to ask questions. Occasionally you may get a helpful answer. I don't know the 'books' for N. O., so I can only give you a small part of the answer.
First of all, if your income stops suddenly, what are your reserves? You may get unemployment payments, but the city won't. It must depend on handouts, federal and state, and slim reserves for a most a year.

Many American cities have a hand-to-mouth existence; if the inflow from business and personal taxes stops, they are in trouble. All their projections are based on a stable inflow of taxes, rentals, etc. As RC says, businesses have been destroyed and many of their employees are in the same boat. Those receiving hourly wages are the first to go; at best they receive benefits for a short period.
Unemployment insurance or payouts are minimal at best, and this depresses the businesses still operating because people can only buy necessities. More layoffs, and more possible bankruptcies. And no one yet knows if their insurance policies will pay- they never do provide full coverage.
One more point- many cities do not insure their properties and equipment. Replacements have to be paid for out of income. The city has to plan ahead for these expenses.
At any rate, these few city employees are only a small fraction of the problem.

Looking outside of N. O., at just one business- the cattle industry is important to south Louisiana and adjacent Mississippi. Fields have been contaminated, buildings destroyed. Many cattle, of those that survived, are not receiving proper feed and care and are not marketable. Small cattlemen will go bust as they face the costs of rebuilding. Loans and insurance seldom cover the costs of rebuilding the business. Workers will be let go. Truckers, equipment including cattle liners bought on credit, have no cattle to haul and thus no income. Will the bank forclose? After all, the security- property- standing behind mortgages is lost or damaged, and new deposits are not coming in. Meat processors and everyone else in the chain from steer to market are caught.