This looks really bad.
Mayor Annise Parker began to outline budget cuts on Thursday that could result in layoffs of more than 2,300 city employees, telling department heads that erasing an estimated $130 million gap will require “extremely tough, if not brutal” decisions.
For months, city leaders have been forecasting a huge budget gap for the fiscal year that starts on July 1. Parker warned top officials two weeks ago of the possible impacts to their departments as she sought the savings to balance the coming year’s budget. In a memo sent to those officials Thursday, she informed them how much they’ll be expected to cut.
Essential “life and safety” services such as police, fire, municipal courts and solid waste will face department cuts of 5 percent. Most departments — including the mayor and council offices – will have to cut spending by more than 27 percent.
“It’s up to them to figure out how to get there, but we have been having a series of intense budget workshops with Council members,” Parker said Thursday. “I’ve been warning them that we couldn’t just prune the branches, we would actually cut off big limbs.”
The mayor formally proposes a budget in May. This month city department heads are giving Council members presentations on services they provide and which among them are most essential. Council adopts a spending plan each June.
The mayor did not specify how many jobs could be lost, but by her math, using a $55,000 average annual cost per city employee for salary and benefits, the layoffs would exceed 2,300.
Via Hair Balls, you can see the Mayor’s memo here. The story cites a decline in property tax revenues as the main factor in the shortfall, with the loss of revenue from red light cameras as a secondary cause. I have two thoughts on this for now. One is that as with budget cuts elsewhere, this is going to contribute to further revenue problems for the city. Putting people out of work doesn’t help the economy, and we’ll feel it in reduced sales tax collections, among other things. Two, much like the Pitts/Ogden budgets in the Legislature have served to do, this may finally lead to the conclusion that some revenue enhancements are needed because the cuts required in their absence are unacceptable. If so, we’ll get a better feel for that as the department heads begin making their presentations about just what this would mean to them, and to us. I’ll say again, I believe that at the least, rolling back the property tax rate cuts of the past few years needs to be on the table. I haven’t seen any elected officials take that position yet, however. I wonder who, if anyone, will be the first to broach the subject.