Santa Fe faces $100M deficit in FY21 - Albuquerque Journal

Santa Fe faces $100M deficit in FY21

Colin Murphy of Santa Fe walks along an empty Palace of the Governors portal Monday. The portal and state museums are closed. (Eddie Moore/Albuquerque Journal)

Copyright © 2020 Albuquerque Journal

SANTA FE – The city of Santa Fe is projecting an “unprecedented” shortfall for fiscal year 2021 – around $100 million – as revenues continue to plummet amid the COVID-19 pandemic.

Mayor Alan Webber announced the projection during a virtual news conference Monday and said the cancellation of such big-money events as the Santa Fe Indian Market, the Traditional Spanish Market, the International Folk Art Market and the Santa Fe Opera’s summer season have especially hurt city revenues.

Tourism in Santa Fe, a city heavily reliant on visitor spending, has cratered since the pandemic hit the state in March. Even as some businesses begin to reopen in a limited capacity, the outlook for the city remains dire.

“We’re deeply affected by this summer’s cancellations of major income-producing events,” Webber said, adding that such events will be among the last parts of the economy to restart.

The deficit represents about 30% of the city’s total budget. City officials said a “worst-case estimate” would feature a $150 million deficit, triggered by a potential second outbreak of the virus in the fall.

Webber said the deficit covers nearly all of the city’s revenue-generating funds. Gross receipts tax revenue, which accounts for nearly 70% of the total budget, would be hit especially hard and drop an estimated $37 million compared with the previous year, Finance Director Mary McCoy said.

The city’s general fund, which finances services and salaries for many city employees, would lose $31 million.

Other funds, such as lodgers tax and recreation fees, are forecast to lose 40% to 50% of their revenues from the previous year.

McCoy said the city’s credit rating could also drop, thereby increasing the cost of issuing debt for capital projects.

The historic level of Santa Fe’s fiscal crisis means city officials will be adjusting the normal budget-making process.

“We’re going to be doing things very differently,” Webber said.

This includes the Finance Department providing quarterly reports to city councilors and other department heads reviewing their own budgets for the next year.

A Monday memo written by McCoy states the city will hold budget hearings in July before submitting the revised numbers to the state.

Samuel Marcus, from California, and Mandi Makala, from France, shop through the businesses now open on the Santa Fe Plaza on Monday. The state museums are closed, and the major events for the Santa Fe Plaza have been canceled due to the COVID-19 pandemic, but several shops have reopened. (Eddie Moore/Albuquerque Journal)

McCoy said the city could receive $35 million total in federal funding over the next two fiscal years from the Health and Economic Recovery Omnibus Emergency Solutions Act, which awaits approval by the U.S. Senate, but added that the likelihood of that figure remaining intact is “highly uncertain.”

How the city would cover the remaining deficit still needs to be decided. Webber said reducing transmission of the virus and making tourism safe again will be key to reinvigorating the city’s economy.

Webber said he does not think that raising taxes would help but that the city is evaluating how raising taxes to certain rates could affect finances.

“It’s not a very good idea to add a tax burden at a time when people are thrown out of work,” he said.

The deficit projection comes in addition to the estimated $46 million shortfall for the current fiscal year, which ends June 30, that the city announced in April.

The city already has instituted a spending and hiring freeze, saving an estimated $27.5 million. The City Council narrowly approved furloughs, either four or 16 hours per week, for more than 1,000 city employees.

Despite the massive cuts, McCoy said the city still has not yet covered the shortfall for the current fiscal year.

Webber said that any decision regarding additional furloughs or layoffs will come during the budget-making process and that no decision had been made as of yet.

“That’s why we’re having a budget process, to figure out what response the governing body believes is the best way to go forward,” Webber said. “When you’re faced with scarcity, you really have to make hard choices.”

Webber also said he did not want to “unnecessarily alarm” city employees and Santa Fe residents.

Representatives from American Federation of State, County and Municipal Employees Local 3999, the union representing many city employees, said they had heard furloughs and layoffs are being discussed.

“We have heard that the city is talking about layoffs and further furloughs for the next fiscal year,” Local 3999 Vice President Gil Martinez said in a Monday phone conversation.

The city previously came under fire for giving longer furloughs to lower-paid employees.

Home » Journal North » Journal North Recent News » Santa Fe faces $100M deficit in FY21

Insert Question Legislature form in Legis only stories

Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email

taboola desktop

ABQjournal can get you answers in all pages


Questions about the Legislature?
Albuquerque Journal can get you answers
Email addresses are used solely for verification and to speed the verification process for repeat questioners.
New Mexico seems determined to extend class time. What ...
ABQnews Seeker
Three competing proposals are on the ... Three competing proposals are on the table
New NM health secretary learning on the job after ...
ABQnews Seeker
Patrick Allen heads a key agency ... Patrick Allen heads a key agency on the front lines of the state’s pandemic response, after leaving behind a lengthy state government career in ...
Kenneth H. Martinez, 1954-2023: Former district judge ‘was good ...
ABQnews Seeker
Albuquerque native, 2nd Judicial District Court ... Albuquerque native, 2nd Judicial District Court judge had a long battle with Alzheimer’s disease
New Mexico bill would ban contracts for migration detention
ABQnews Seeker
Recently introduced bill could unwind contractual ... Recently introduced bill could unwind contractual arrangements at Otero County Processing Center in Chaparral
Native American leaders: Educational trust fund will be key
ABQnews Seeker
Native American leaders said creating a ... Native American leaders said creating a special $50 million trust fund to help finance educational p ...
Agency delays protections for imperiled bat, prairie chicken
ABQnews Seeker
U.S. Fish and Wildlife Service announced ... U.S. Fish and Wildlife Service announced new designations for the lesser prairie chicken set to take effect bumped to March 27
No drama for birthday llama: ABQ llama celebrates 27th ...
ABQnews Seeker
'This llama is bringing everyone together,' ... 'This llama is bringing everyone together,' says family friend
New Mountain West Commissioner Nevarez gives nod to former ...
ABQnews Seeker
New Mountain West Commissioner Gloria Nevarez ... New Mountain West Commissioner Gloria Nevarez discusses her new job in an ever-evolving college athletics landscape.
Talking Grammer, Ep. 59: MWC Commissioner Gloria Nevarez
ABQnews Seeker
In Episode 59 of the podcast, ... In Episode 59 of the podcast, we had a conversation with new Mountain West Conference Commissioner Gloria Nevarez.