Mayor sends legislation to City Council and proposes executive cuts.
ALBUQUERQUE – Mayor Richard J. Berry has come up with at $19 million solution to address the city’s current revenue crisis. However, the mayor warned that the outlook for the future could deteriorate further.
The current revenue forecast is projecting a shortfall of more than $12 million. However, the city is not even half way through the fiscal year. The shortfall could grow if revenues continue to fall. So, Berry has planned for a $19 million shortfall.
“I am cautiously optimistic our economy will rebound,” Berry said. “But, we still need to plan for a further deterioration of the budget.”
The current plan does not mandate furloughs or layoffs. It does call for city councilors to approve legislation of $7.5 million in various adjustments that will reduce the general fund shortfall. Additionally the Mayor has requested a cost reduction plan that will reduce the shortfall by another $11 million.
The budget adjustments presented Friday to the City Council include $1 million from the city’s fuel reserve, $733,000 that was set aside for a run-off election and $201,000 in reduced interest costs.
The Mayor had already decided to keep the Albuquerque Police Department at 1,100 officers for now. He has cut the cost of his appointed positions by 13 percent. Mayor Berry has also made smaller cuts around City Hall. He has put a stop to the wrapping of city vehicles with elaborate graphics and the purchase of a new vehicle for himself. Berry also said Friday he is only going to fill critical positions.
“It’s clear we have this problem and it is up to us to fix it,” Berry said. “The goal is not just to balance this year’s budget, but to set the foundation for fiscal responsibility in moving forward.”
Several factors have caused the budget shortfall. Gross receipt taxes fell 9.4 percent in the first five months of the current fiscal year when compared to the previous year. There was no savings plan in place to deal with the current shortfall. And, salary increases had been negotiated with the labor unions by the previous administration with no clear way to pay for them
The projection for fiscal year 2011, which begins in July 2010 is also grim. Financial advisors are finalizing the 5-year revenue forecast which will identify the shortfall for 2011. The Mayor is asking all city departments to identify cost savings and operational efficiencies. The Mayor is also seeking the help of labor unions to come up with additional solutions to address the budget shortfall.