Mayor Mary-Ann Baldwin already had to scale back her “Moonshot” parks bond amid the economic uncertainty unleashed by the coronavirus pandemic.
Now, she’s preparing for a recession budget that will mean tough cuts to city services in order to make up for a dramatic shortfall in revenue from the shutdown.
“There are going to be things that people love that we might not able to do. Maybe, I hate to even say this, Fourth of July fireworks,” Baldwin told the INDY Tuesday. “There are things that are traditions and that is going to be really hard for people to stomach.”
The city is facing an up to $36 million shortfall in revenue this year, Baldwin said. About a fifth of the city’s general fund comes from the sale tax, which has taken a big hit with businesses shuttered throughout the city.
The city has also suspended fees for the bus system, which bring in about $3 million a year.
Last year, the council unanimously voted to approve a $1.04 billion spending plan for the 2020 fiscal year. The new council has until the end of June to pass a 2021 budget.
Baldwin was on council the last time the council had to approve a recession budget in 2008. That year, the council enacted a hiring freeze, cut back on planning studies, and delayed road maintenance to make ends meet.
“It’s not pretty,” she says. “But that’s where we are.”
But they were able to run the city without laying off staff. Baldwin promised to avoid lay offs again as well as any tax increase.
“We are committed to no tax increase in light of what’s happened. We just think that would definitely send the wrong message,” Baldwin says. “Now the test will be, how do we do that? So we’re going to have to make significant cuts.”
City spokeswoman Julia Milstead told the INDY while “it’s too early to know the exact impact” the shutdown will have on the city’s budget, cuts to services are inevitable.
“We know we will have to make reductions to manage the loss of revenues, such as no non -essential travel, suspending non-essential contracts, and holding vacant positions,” Milstead said via email. “The City Manager is working with department heads and offices to identify savings. We start from a principle of no layoffs for our current city employees.”
“Obviously, these are unprecedented times,” Milstead added. “We will do everything we can to balance the budget while minimizing the impact to our city employees and citizens, but it will be challenging.
Contact Raleigh news editor Leigh Tauss at ltauss@indyweek.com.
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