Figuring out the next city of Santa Fe budget is turning into a political storm.

Key decision points are still weeks away, but at tonight's City Council meeting, officials could approve the date for a public hearing on whether to use reserves from a utility fund to fill a $4 million budget gap. Supporters of a property-tax increase don't have a formal proposal on the table, but they say that effort isn't dead. Meanwhile, other councilors say more belt-tightening is in order.

On Thursday, the Finance Committee is scheduled to meet all day with department heads and administrators to pore over details of the spending plan for the fiscal year that begins this summer.

Although city officials are not expecting to come to an agreement about the budget until right before a June 1 deadline, some issues are already taking shape. Following is a primer on the basics.

Where did it go this year?

The city's general fund is the area where officials have the most discretion about spending and where tax increases can have the some of the most noticeable effects on residents.

The current fiscal year's general fund spending plan is about $72 million, a figure roughly $5 million less than the year before.

Public-safety operations make up 45 percent of the general fund, which means officials appropriated more than $32 million for police, fire and emergency medical services over the last 12 months. Inside each of those agencies, costs for personnel are about 70 percent of the budget.

The next largest expense in the city's general fund is the Public Works Department, which takes up 18 percent of spending. This year, the department has a budget of nearly $13 million and is responsible for road maintenance and road projects as well as the parks, trails and watershed, and all of the recreation facilities such as swimming pools and fitness centers.

Community services such as libraries, youth and family programs and the Arts Commission account for 10 percent of the general fund.

What's in store for 2011-12?

City Manager Robert Romero has ordered the Finance Department to prepare what he calls a "flat budget" for the fiscal year that begins July 1 — a reflection that he's not making any requests for additional programs. Romero also is planning to reduce spending to put it closer in line with declining sales-tax revenues.

Considering the rising costs for items such as gasoline and employee benefits, numbers are all over the map. As of press time, the city Finance Department was still working on a packet of budget spreadsheets for Thursday's meeting.

The cuts floated so far won't balance expected revenues with expenditures, however, and officials are kicking around ideas about how to fill that gap. For the last two years, they've used a combination of reserves and hiring freezes to make up the difference.

Councilors who announced they had aligned with Mayor David Coss in March — Chris Calvert, Carmichael Dominguez, Rosemary Romero and Ron Trujillo — backed two different plans this spring, first an increase in property taxes and now an idea to cancel the proposed increase and use reserves from a bloated wastewater utility fund instead.

Other proposals include a broad limit to personnel spending proposed by Councilor Matthew Ortiz and pay cuts for almost all city workers, or unpaid furloughs, proposed by Councilor Miguel Chavez.

Cuts to services or employees?

In order to make up the lost revenue in recent years, officials have raised admission prices at some recreation centers, hired a new billing company to increase cash for ambulance services, hiked fees for storm-water management and sewer and water services, shortened library and bus hours, and canceled events such as an annual Easter egg hunt and free vacation for city workers on the afternoon of Good Friday.

Romero also has increased responsibility for some managers instead of hiring new supervisors. For example, instead of two department heads, the Public Works and Community Services departments are led by a single director now, Ike Pino. Library supervisors and other middle-management positions have disappeared.

Several city program managers contemplated other changes as officials made noise about the need for deeper cuts, including at the Transit Division, which drew crowds by seeking input on plans to raise fares and eliminate bus routes and Sunday service. Those proposals won't appear on Romero's budget recommendation this year unless councilors order them, Romero said.

Negotiations with three city workers unions may address issues such as sick leave and other paid time off, but those talks are not likely to garner results before looming budget deadlines.

State officials expect the city to provide an approved budget by June 1. Two years ago, the city missed that deadline but still had a plan in place by the start of the fiscal year.

Where do revenues come from?

Gross-receipts taxes collected at cash registers and by businesses that work on contracts here are the city's biggest funding source, constituting 67 percent of general-fund revenues, with nearly $50 million in the 2010-11 budget.

Charges for services, licenses and permits, fines and forfeitures made up another $8 million in city coffers, and property taxes and fees charged for utility franchises accounted for another $5 million.

Although it's a politically loaded concept, when it comes to state authority for taxing, the city has plenty of wiggle room.

Officials last raised property taxes in 2006, when Asenath Kepler was city manager and police and fire unions backed a tax to help pay for capital improvements, equipment and other public-safety needs.

Workers unions and managers of those agencies say they need even more money for when the city executes a plan to annex thousands of acres into the city limits in the next two years.

The city's portion of property taxes was about 9 percent of the total property-tax levy on a given piece of real estate this year. Of the 20.132 mills levied by state, county and school jurisdictions, 1.772 mills went to the city.

State laws would allow Santa Fe to levy up to an additional 4.833 mills. Coss and councilors in his corner proposed increasing the city portion of property taxes by about 41 percent by hiking the city rate to 2.93 mills, a change they say would add about $116 to the annual tax bill on a home with a full assessed value of $300,000.

No proposals are targeting gross-receipts tax rates, but the City Council could choose to impose more of those taxes as well. The city's rate sits at 8.1875 percent. State laws allow additional increments that would equal 0.25 percent for "quality of life" programs, 0.5 percent to help cover municipal environmental services and 0.25 percent for general municipal purposes.

How do we compare to other cities?

City officials have gone to great lengths to avoid making large changes to staffing patterns but have held nearly 250 jobs vacant or unfunded after workers moved on as a way to keep expenses lower.

Still, Santa Fe's worker rolls appear bloated when compared to other New Mexico cities, according to figures in a report from the New Mexico Municipal League, published in July 2010, and 2010 census data.

Albuquerque has 6,800 full-time employees and a population of 545,852, for a ratio of 1 employee for every 80 residents. That city's general-fund expenses last year were about $434 million.

In Santa Fe, which has a population of 67,947 and 1,639 full-time employees, the ratio is closer to 1 employee for every 41 residents.

Las Cruces, which has a population of 97,618, has 1,339 workers, or a ratio of about 73 city residents for each employee. Its general-fund expenditures last year were about $74 million.

All three New Mexico cities provide municipal water, sewer and trash pickup services as well as public transportation and recreational facilities.

Romero said city staff members are analyzing the differences in those budget scenarios to determine why Santa Fe seems to have a heavier load of workers.

According to the National League of Cities, budget woes are hitting municipalities across the country, and many are choosing to reduce staff as a way to cope. A report compiled early this year indicated about 71 percent of officials reported making cuts to personnel.

The city of Boca Raton, Fla., which has a population of about 86,445, required most city workers to increase their personal pension contributions. The city of Flagstaff, Ariz., decreased employee health benefits.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.