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| Out-of-control Government Spending explained |
| City of Spokane |
| Spokane Mayor Mary Verner today briefed the Spokane
City Council on deteriorating financial conditions for the City’s
2010 and 2011 budgets. “The news is dismal. We are facing the same problems as the nation, the state, and other local governments,” says Mayor Verner. “The biggest advantage for Spokane is that we know what our situation is, and we’re dealing with it.” The City has revised its budget projections based on lowered financial performance and the general economic outlook for Spokane and beyond. The new projections include: Up to an additional $2 million shortfall for the current year. This is in addition to the $2 million shortfall already covered by a hiring freeze and spending restrictions required by the Mayor in a May 2010 Executive Order, along with other changes. A total shortfall for 2011 of $12 million, up from $10 million shortfall we projected at the beginning of the year. “We are working on plans to deal with both of these significant budget problems, and the answers are not simple,” says Mayor Verner. “We are looking at all options and are considering all the feedback we’ve gotten from citizens and staff.” In its 2010 General Fund Budget, the City planned for a modest recovery over 2009, and initially, the City’s tax collections tracked close to expectations. Since April, the City has seen significant changes for the worse, primarily in the area of sales tax. Other revenues also have faced declines, including utility taxes, real estate excise tax, and interest income. The General Fund is the portion of the City’s budget that pays for basic government services, including Police, Fire, Streets, Parks, and Libraries. Revenues primarily come from sales, property, and utility taxes. For 2010, work is centered around decreasing expenses—deferring purchases, cutting out spending, and working with bargaining units to reduce labor costs. For the 2011 budget, the Mayor is continuing with a balanced approach that still will include strategic reductions, employee participation, use of available resources, and the possible addition of revenue. The remaining gap after these steps will be met using across-the-board departmental reductions. Across-the-board reductions of 6 to 9 percent are possible. That’s double and triple the percentage of the across-the-board reductions included in the Mayor’s May 2010 initial proposed budget. That initial budget, with across-the-board cuts of 3 percent, included the loss of 44 positions, and the higher reductions could roughly double or even triple that number of position reductions. |
| Spokane County |