Phoenix Budget Situation: “Much Worse Than the Worst-Case Scenario”
September 14th, 2009Via: Arizona Republic:
Seven months after Phoenix made its largest budget cuts in history, City Manager Frank Fairbanks has informed City Council members that the cutting may not be over.
The city could face a budget shortfall of $65 million to $95 million in the middle of the current fiscal year, Fairbanks said, as Phoenix – like most Valley cities – continues to take in fewer sales-tax dollars than expected.
Finance officials say they won’t be able to determine the size of the gap until departments submit their expenses this fall, and the council likely won’t take any action until early 2010. But the revenue trend doesn’t look good.
From January through August, Phoenix collected about $231 million in sales-tax dollars, $23 million, or 9 percent, less than projected. That means fewer dollars to pay for such services as police and fire protection, parks and libraries.
“It’s devastating. It’s much worse than the worst-case scenario,” said Councilwoman Thelda Williams, who expected a midyear shortfall of less than $10 million. “This is too large to handle without making huge community sacrifices.”
