The mayor said few people are spending money, so the city is making less in sales tax revenue. She spelled out the shortfall to City Council members Thursday morning.
The City of Fresno's financial security is on shaky ground, and the unprecedented $27.8-million dollar shortfall will surely end up in some job losses.
"I think it's safe to say there will be layoffs, it's just a question of how many."
Mayor Ashley Swearengin summed up the grim news to City Council members Thursday, there's no way to get around making significant cuts. Those decisions must be made within the next few weeks.
"It is going to be very painful and it's certainly happening across the state. We're not alone in this. Fresno has been fiscally prudent in the last number of years and it could be much worse. Our response is to act early to be smart in making these cuts but make sure we are living within our means," said Mayor Swearengin.
A big drop in sales tax revenue made budget problems even worse. The city saw a $13.3 million dollar decline from fewer purchases. Nearly $2 million alone is from losses in sales tax from car sales.
The City of Fresno collected $5.9-million dollars for the 2008 fiscal year in auto tax money, which tapered off to $4.1-million dollars this year.
At the police department, 85-percent of its budget is spent on personnel, so the police chief said considering different options is difficult. He's working to making cuts while trying to avoid furloughs or layoffs.
"The last thing we want to do, especially in today's economy with all of the challenges we are facing in law enforcement, is to downsize the police department in terms of sworn officers," said Fresno Police Chief Jerry Dyer.
Another major factor in the budget deficit is the city's retirement fund. That's projected to cost about $7.2-million dollars. Combine that with an extra $9.6 million dollars in increases the city has had in general expenses.
The mayor has asked all department heads to make quick changes to accommodate the shortfall.
Mayor Swearengin hopes to have a final budget reduction plan mid-November; with changes to take effect by January of 2010.
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