To fill the gap, the City is looking mostly towards cutting expenses as well as some potential tax increases. These cuts are expected to result in the release of 126 existing staff and the elimination of 68 additional positions currently vacant. The potential tax increases total $3.8M including an array of tools including a car tab tax and increases in B&O taxes on non-profits.
Rather than trying to take on the full $31M now, the Council has decided to focus on making up 75% of this now, or $23M, and looking at the remainder in early 2012 based on updated revenue and expense projections. This approach recognizes the size of the gap the City is facing. $31M is equal to the size of the entire 2012 general budget for public works; community & economic development; legal; city manager; city council; and human resources departments - combined.
At today's Council Study Session, the City was discussing making $11.7M worth of these cuts to non-public safety departments with the remaining $11.3M coming from Police & Fire. If the City does move to a full $31M reduction plan, the remaining $8M may come from Police & Fire. This really means that everything is on the block during this budget review process.
To minimize the cutting of positions, the City has approached the unions about cuts to their salaries in addition to the 4-10% cuts non-unionized employees are taking. As Councilmember Fey said, "This is an opportunity for our labor partners to step up and help us."
As an alternative, the City has also put a series of tax ideas forward. Those brought forward to date include:
- Car Tab Fee
- Eliminate Non-Profit Healthcare B&O Deductions
- 0.1% Sales Tax for Human Services
- Increase Speed Camera & Red Light Camera Fines
- Eliminate Admissions B&O Tax Deductions for Non-Profits
- Postpone 2012 Retirement Fund Contribution Increase
- Increase Annual Business License Fee
- Eliminate B&O Job Creation Tax Credit