What follows is a local letter which may not interest someone who lives outside of the Metro Denver Area, yet it is indicative of cities and states all across the country. State legislators here and all over the country are also facing budget shortfalls which they will have to deal with in the coming year and aggravated by Colorado's ridiculous TABOR law which limits the amount of money that legislators can spend to the sum of inflation plus population growth, with inflation being measure by the consumer price index in the city of Denver. To top it off... monies that are collected above and beyond are to be refunded back to the tax payers even though the state may be in need of the funds (it's nuts!). Denver Public Schools are also facing budget cuts (although the schools themselves will get some increased funding) What will happen as a result of all of the tightened belts is anyone's guess but one guess that I would make is that on a national level Republicans will use the opportunity to push through cuts on Social Security (and it's not really a guess, it is already being talked about). It is not necessary to cut Social Security in order to balance the budget nor will it make enough of a difference to make it worth while. It should not be done! At any rate...
As a city employee, I and my fellow employees often receive the bad news about city budgets first. As it happens, this morning, in my inbox a letter from our new interim mayor discusses the budget for 2012. I include the entire letter because the new mayor is a nice enough fellow and worth reading in full. As you will see, the city's budget has already been slashed 4 years in a row and now faces another round of cuts. What will it mean for the library remains to be seen and whether I or many of my coworkers will have employment, who knows. What is certain is that we will go another year without pay raises and with furlough days (days without pay- which are essentially cuts in a pay) while the costs in living continue to rise. The question occurred to me today as I read this letter: If businesses are doing so well, why isn't there enough revenue being generated? Why aren't we seeing a trickle down effect in the so-called economic recovery (although it is slow they tell us! be patient!) at the local level? At least tax revenues should be stabilizing... shouldn't they?
January 19, 2011
As I write this, my first letter to my fellow City employees in my new role as the Mayor of Denver, I am full of pride and excitement about the journey we are embarking on together.
I feel this way because I am working with the most dedicated and hard-working employees I have ever known. And while I greatly appreciate the work of those managers who sit by my side in daily meetings, I am also referring to those of you in the field and those of you behind a desk; those of you driving trucks, pulling weeds, enforcing parking, polishing the floors, managing projects, supervising work groups.there are so many important tasks that you do every day.I am writing to ask for your partnership and input as we move forward.
There is much for us to accomplish in the coming months. As I said in my inaugural speech,".I want you to know that I am not afraid to carry this load, for I have the love of a supportive family, great partners in our City Council, a wonderful community of involved citizens and I have you, my fellow City employees, to help me."Those of you who have worked with me in the past know that I believe, with all of my heart, that it will take every one of us, working hard, working together as a team, to tackle the many upcoming challenges.
I have referred to the City's budget for 2012 as one of my priorities, even as we enter 2011 with a balanced budget. I am prepared to work with you, City Council and our residents to identify strategies that will balance our budget and reduce the oncoming deficit.
The bottom line is that, after three years of closing budget deficits totaling $346 million, we now project a gap of $100 million between revenues and expenditures for 2012. Facing a significant budget deficit for a fourth year in a row is difficult, but the focus, creativity and hard work that our City team has shown in each case will again enable us to work through the challenge of balancing the budget.
While economic indicators show some improvement in the economy as a whole, revenue growth for the City remains slow. 2010 sales tax revenue, which makes up nearly half of the City's general fund budget, is approximately 5.2 percent ahead of the same period in 2009. That's good news, but it is growth on a base that's dropped back to levels last seen three years ago.
To avoid a deficit in 2012, sales tax would have to grow 12.5 percent every month for a year. In addition, total revenues are projected to grow at 2.0 percent for 2012, a rate below our average growth rates. If you add it all up, the combination of the significant reduction in revenues caused by the financial crisis and the now slow growth rates that have followed continue to force the City to deal with a significant budget deficit.
Our success in the past at reducing general fund expenditures came through increased efficiencies, eliminating waste, service reductions, and sacrifice from employees. Some of the savings were permanent, such as the reduction of primarily vacant positions, and some of the savings were temporary, such as the use of furlough days. In addition, reserves were used according to our financial policies to reduce the need for further service cuts. Not being able to use additional reserves or rely upon temporary measures in 2012 contributes to the deficit we face.
We will continue to monitor sales tax and other revenue carefully in the coming months to see if any adjustments must be made as we head toward 2012. Our focus continues to be maintaining core services for our residents, creating sustainable changes that lead to budget savings, and finding ways to reinvest in our City workforce. I would ask that we each start now to consider our budget for 2012 and how we can take actions now that will reduce the anticipated $100M deficit.
You and I have risen to the challenge in recent years of helping the City find needed savings and efficiencies to balance the budget. None of this can be achieved without your voice and assistance.
For the past two years, we've asked for your budget-saving suggestions. We collected many ideas about how to cut costs and work more efficiently, and now, I ask you to participate again and share your thoughts with us. I hear casual conversations about the budget in the hallways and elevators and I know you have valuable input to share. Be heard and send your suggestions again this year toMileHighMayor@denvergov.orgor call 720-865-8181.
As I have said, you fulfill my dream that we are building a greater city. I proudly remain part of you, and I thank you for your continued professionalism and service to our community.