Tampa weighs deep cuts and layoffs
TAMPA – City officials laid out grim scenarios Thursday for balancing next fiscal year’s budget, including deep spending cuts and layoffs ranging from 20 fulltime workers to more than 15 percent of the city’s 4,285-strong workforce.
Tampa faces a projected $28 million shortfall next fiscal year and Mayor Bob Buckhorn has directed the city’s department heads to come up with budget-trimming scenarios that cut 10 to 15 percent across-the-board from their recommended spending packages.
The overall cuts, which run from $2.4 million to a worst-case scenario of $52 million, are needed to offset a projected loss of property tax revenue, with housing values expected to drop for a fifth year in a row.
At a budget workshop Thursday, Sonya Little, the city’s finance director, told city council members that bridging the shortfall could mean large-scale layoffs and massive cuts.
“Some very tough decisions will have to be made,” she said. “We have to consider the level of service that we are going to provide and the impact thereof.”
In the two extreme cost-cutting scenarios, the layoffs would have a profound impact on the city’s police and fire departments, both which have remained relatively unscathed despite several consecutive years of budget-trimming to offset huge revenue shortfalls.
Under a 10 percent across-the-board cut, the city would be forced to cut about 475 jobs, only 60 of which are vacant. Of the cuts, 138 would come from Tampa Fire Rescue, 130 from the police force, 54 from public works and 86 from parks and recreation.
The doomsday scenario – a 15 percent cut – would eliminate 729 jobs, about 63 of them vacant, and would include 200 from fire, 194 from police, 62 from public works and 165 in parks.
“Under this scenario, we would be taking a clean sweep, across the board,” Little said.
Representatives of the city’s three largest labor unions, who begin collective bargaining negotiations with the city this summer on new contracts, hadn’t yet reviewed the city’s cost-cutting scenarios and weren’t prepared to comment about possible job losses.
“We’ll just have to see what the city’s proposal is and whether there are other sources of revenue,” said Greg Stout, president of the Tampa Police Benevolent Association.
Little said the city could avoid large-scale layoffs by filling the projected shortfall entirely with reserve funds former Mayor Pam Iorio amassed during her final years in office.
Under that scenario, she said, the city would only cut 50 positions, about 30 of which are vacant.
But Little cautioned that such a move would reduce the city’s reserve fund to about 21 percent of its general and utility tax funds. Under Mayor Iorio, the city’s finance division established a benchmark of 20 percent of fund balances to maintain favorable bond ratings.
“That would put us extremely close to our 20 percent threshold,” she told the council.
The reserve funds are also supposed to give the city financial padding if an emergency, such as a hurricane or other natural disaster, required large, unplanned spending.
Council members will make the final decision on cuts over the next several months, but declining revenue for next year’s operating expenses leaves little wiggle room.
Councilwoman Mary Mulhern called the choices facing the council in the next year “grim” and said she is concerned about adding to the city’s 10.5 percent unemployment rate.
“On the one level, cutting personnel looks like its saving money, but in the long run, it’s contributing to the problem,” she said. “Where are these people going to find jobs?”
Tampa’s taxable value for this year is $21.4 billion, down 3.9 percent from last year. The lower valuation means $5 million less in property tax revenue for the FY 2012 budget.
Overall, the city’s property tax collections have fallen by $44 million since 2007.
To plug a $32 million deficit for the current fiscal year, the city laid off dozens of workers, cut spending and consolidated several departments, which saved an estimated $19.5 million. The remainder, $12.5 million, was filled with reserve money.
Since 2007, the city has cut more than 500 jobs through layoffs and the elimination of vacant positions.
Payroll and pension benefits – which make up more than 80 percent of Tampa’s general fund, or about $287 million in 2011 – are another factor driving up costs
There are no plans to increase Tampa’s property tax rate, city officials have said, which has remained unchanged for the past four years at $5.73 per $1,000 of taxable value.
Buckhorn will present his proposed budget to the council on July 28. Public hearings are tentatively scheduled for Sept. 7 and 21. The budget must be approved by Oct. 1.