Richard Berry (Photo by Enrique C. Knell)
Albuquerque Mayor Richard “R.J.” Berry says he has developed a plan to deal with declining gross receipts taxes, which could lead to an estimated $12 million to $19 million budget deficit.
On Friday, Berry warned that the “outlook for the future could deteriorate further” if gross receipts continue to decline as they have in the first five months of the 2010 fiscal year.
“It’s clear we have this problem, and it is up to us to fix it,” Berry said. “The goal is not just to balance this year’s budget, but to set the foundation for fiscal responsibility moving forward.”
Berry has been taking a hard look at Albuquerque’s $475 million budget. He said his plan to deal with the shortfall will be rolled out in three stages — and city employees will not face furloughs or layoffs, at least for now.
The mayor, who campaigned on improving public safety, said he won’t be adopting a proposal made by his campaign opponents to hire 100 new police officers and add to the 1,100 member force. He said that would add $8.6 million annually to the budget and would be “fiscally irresponsible.”
Berry told reporters he has already taken steps to help alleviate some of the financial strain by filling only critical positions in his administration.
In fact, during the first three weeks in office, Berry said he has reduced the number of politically appointed positions by 13 percent — an annual payroll savings of $500,000. He also plans to continue a hiring freeze that his predecessor, Martin J. Chavez, implemented last year, and has already discontinued Chavez’s policy of “wrapping” city vehicles with expensive graphics. Berry said that practice — at $700 per unit — has cost the city more than $150,000 in the last three years.
Berry is asking city councilors to help him by de-appropriating $7.5 million in revenues and making other budget adjustments. He also said he is reviewing all city contracts to “ensure these are critical to core mission and basic city services.”
He also wants the council to de-appropriate $733,000 that had been set aside for a run-off election — which was avoided by his general-election win in October.
Several factors have caused budget woes
Berry said gross receipts taxes, which represent 64 percent of total general revenues, were down 9.4 percent in the first five months of the fiscal year. Berry claimed there was no savings plan in place, from the previous administration, to deal with the current shortfall.
Berry said he’s also saddled with multi-year salary increases negotiated with the city’s police and fire unions, “with no clear way to pay for them.”
The mayor, a small business owner (along with his wife), is asking city managers to identify areas where they can trim their budgets by 2 percent. He wants his new directors to “thoroughly review their internal organization structure and operation for efficiencies and cost savings to identify any reorganization or restructuring that can be implemented” in the next fiscal year — which could lead to furloughs or layoffs after the new year.
His directors are also being instructed to review all contracts to ensure they are critical to their department’s mission, delay those that are less time sensitive and even cancel contracts that are deemed “unnecessary.”
At the same time, Berry is reminding them that those reductions “should have a minimal impact on basic services.”
“The mayor wants to maintain basic city services,” Acting Budget Officer Mark Sandoval told NMPolitics.net. “That’s his priority.”
In a memo to City Council President Ken Sanchez, Berry wrote that he is looking forward to working with the council during “these tough economic times.”
“The Administration believes the restructuring and streamlining identified by directors will serve as the foundation for the remainder of the Administration,” Berry wrote. He also promised in the memo to continue to monitor revenue and provide the council with monthly updates.
While Berry is “cautiously optimistic our economy will rebound,” he said he plans to use any recovery revenue, or excess savings from his cost reduction plan, to help him “meet the additional financial demands” forecasters project for Albuquerque’s Fiscal Year 2011 budget, which also “poses significant fiscal challenges.”
St. Cyr is a contributing writer for this site and a reporter at 770KKOB.com. He can be reached at peter.stcyr@gmail.com.