Shrinking city revenue may force additional budget cuts

A 23 percent revenue reduction could result in the city of Maricopa having to cut an additional $1.9 million from the current year’s budget.

“I have not looked at the budget numbers yet, but as a council we will make sure the city’s budget is balanced,” said Mayor Anthony Smith.

According to data obtained by InMaricopa, the city experienced a 23 percent year-to-year decrease in sales tax, permit and state shared revenue collections during the first six months of the fiscal year.

If those numbers hold steady for the final six months of the fiscal year, the city would experience a budget shortfall of approximately $2.87 million more than the $2.6 million shortfall that was already programmed into the budget.

A portion of this additional revenue shortfall was addressed in December when council cut $935,528 from the budget to deal with the slowdown in new home construction.

To reach this total, council made nearly 60 budget reductions, eliminating two vacant police officer positions, three vacant positions in the planning department and funding to open school district fields for public use.

The council also considered cutting funding for the Salsa Festival, the Fishing Derby, Movies in the Park, a scholarship match program, one position in the purchasing department, training for fire personnel and the hiring of an investment management firm.
 
If additional cuts are now necessary to balance the budget, Smith said he believes these things would be the first considered for elimination.

When dealing with the past round of budget cuts, Councilmember Alan Marchione, who was elected after the current budget was crafted, said the city must do everything possible to operate within a balanced budget.
 
“I am not opposed to cutting city employee salaries and benefit packages if necessary,” he said. Marchione added that he would like to see the city base its next budget on a projection of zero housing permits being issued until revenue is back in line with expenditures.
 
The city initially based the current budget on the expectation of issuing 36 permits per month for the construction of single-family homes. That number was adjusted to 10 permits per month when council made cuts in December.

Since then, the city has yet to hit the 10-permit mark in a single month and is averaging eight monthly for the year.

“The city was overly optimistic,” Marchione said. “We are now going to have some tough decisions to make.”