Sunday, March 30, 2008
200 City Positions May Go for Good
By Dan McKay
Copyright © 2008 Albuquerque Journal; Journal Staff Writer
Faced with a flat economy, Mayor Martin Chávez will propose eliminating more than 200 vacant positions at City Hall this summer.
His budget package for the coming year will also call for shifting some money from the city's construction budget into the general operating fund leaving the city with less for capital projects.
The budget outlines about $473 million in spending for operations 5 percent less than was budgeted for this year. The figures are subject to change because city executives were still developing the proposal Friday.
Contributing to the tight budget are a small tax cut that goes into effect this summer and a forecast for no growth in the economic activity that drives sales-tax revenue.
"Government will be shrinking, which I think will be a healthy thing," Chávez told the Journal.
The mayor will formally send his budget package to city councilors Tuesday. They will have until May 31 to make changes and take final action on it.
The fiscal year starts July 1.
Chávez said the city began holding open vacant jobs this year as the economy slowed. The 200 jobs he proposes to cut are vacant at the moment, meaning there will be no layoffs. The move should save about $11 million in the upcoming budget, he said.
Sworn officers, such as police and firefighters, aren't part of the cuts.
Chávez also wants to reduce the percentage of property-tax revenue spent on capital projects, such as roads, parks and city buildings. The capital program last year totaled around $160 million broken into several bond questions put before voters.
If the mayor's changes go through, there would be capacity for only $152 million in bonds in the 2009 capital program. It would remain at that level in 2011 before climbing back to $160 million in 2013.
The move would free up roughly $11 million a year for spending on city operations.
Here's a look at other aspects of the mayor's budget proposal:
City executives projected that spending would exceed revenue by about $65 million if no budget adjustments were made. That's even higher than initial estimates of a $50 million shortfall.
It's the biggest gap Chávez has faced since taking office in 2001. (He was also mayor from 1993-97.)
The proposal provides 5 percent pay raises for firefighters, 11 percent increases on average for police and 3 percent raises for transit workers. The amount for other employees is part of ongoing union negotiations.
"No one else will do that well," Chávez said of other city workers.
The city wouldn't spend $1.6 million that had been planned to help purchase a helicopter.
The city would spend less than it had originally estimated would be needed to support the operation of capital projects that come online. There would also be less spent than once estimated for transit, the city's self-insurance program and travel.
"What this is, essentially, is a flat budget," the mayor said.
Social-service programs wouldn't get additional money despite pressure to expand them.
The smaller budget proposal for next year comes after years of good growth since Chávez took office in 2001, helped by both the economy and a voter-approved tax increase for public safety.
A tax cut scheduled for this summer will go into effect July 1. It will reduce the gross-receipts tax rate by an eighth of a cent, costing the city around $17 million in revenue.
Anna Lamberson, Albuquerque's chief financial officer and an economist, said she isn't nervous about gross-receipts-tax revenue coming in even lower than projected. The budget forecasts no growth in the economic activity that produces sales taxes, but there has been a slight uptick in building permits, which might help sales-tax revenue down the road, she said.
Chávez said construction at Mesa del Sol the massive development south of the airport may also help city tax revenue.
The $473 million general operating budget is just one part of the city's overall financial plan. Altogether, the city expects to spend more than $900 million next year. That figure includes city departments that largely survive on their own revenue, such as trash removal and the airport.