The pandemic shutdowns, necessary for health and safety, caused the economy to grind to a halt.
It’s the amount that is shocking.
Starting July 1, the city faces a $100 million budget deficit.
Already, the city had forecast a $46 million budget gap across all of its funds for the current fiscal year that ends June 30. Next up, though, is dealing with the projected $100 million deficit — which could be as high as $150 million if a second wave of the novel coronavirus hits. The shortfall is not just in the general fund budget but in all the many ways the city spends money, projected around $370 million this fiscal year before the pandemic.
While shocking, the math remains pretty simple.
Recurring expenses are higher than recurring revenues.
Cities, like state governments, cannot spend more than they take in.
The federal government can spend at a deficit. Santa Fe, nor any other city, cannot. That’s why the construction of a proposed budget — with just a few weeks to do it and a lack of hard numbers — is going to be difficult.
Already city workers are dealing with reduced working hours and the city has frozen its spending, although that still hasn’t made up all of the $46 million gap. More cuts now and in the future will be needed.
Mayor Alan Webber, in discussing the budget crisis with reporters Monday, would not predict what services might be impacted — and that’s wise. First, the city doesn’t know just how bleak its revenue picture is. What’s more, City Council members have to be brought into the budget discussions early.
Here’s why the revenue picture is cloudy. Gross receipts taxes are collected at point of sale. Then, the state disburses them to cities, counties and other entities, with a lag between collection and disbursement of about two months. Santa Fe just received its GRT payment for March, which had declined only about 5 percent.
That’s the month that Gov. Michelle Lujan Grisham issued her public health order shutting down much of the state because of COVID-19 — city officials expect April’s GRTs to bottom out.
Adding to the pain is the cancellation of Santa Fe’s summer events, the economic engines for a town dependent on visitor spending. No markets, no opera, no music festivals, no downtown bandstand concerts. The situation is unprecedented, with hope remaining that federal and state dollars will help shore up the budget somewhat. Although such aid is being held up by absurd Washington politics.
A changed budget process will allow greater scrutiny earlier, so that difficult choices don’t come as a surprise. Instead of a Finance Committee presentation and budget hearings, the budget proposal will go before all three major city committees — Finance, Public Works and Utilities and Quality Life. This should translate into greater input from City Council members as the budget is being built.
Those aren’t the only people who need to weigh in. On Monday, the city put a survey for citizens online about what services matter most to them. (Here’s a link: tinyurl.com/y8qxu9pu or visit the city’s Facebook page; it’s there, too.)
On it, you’ll see questions about the bus system, the downtown shuttle service, youth programs and all the other bits and pieces that make up the work of city government. Other queries cover trash pickup, recycling, fixing streets, maintaining parks and the basic blocks of services. The city is trying to find out what matters most to residents.
One section of the survey demonstrated how serious the budget gap is, with respondents asked to weigh the importance of recreational centers versus libraries.
Keep all the rec centers but no libraries? Keep all the libraries but no rec centers? Cut from both? Such could be the choices, perhaps the only choice.
We’ve said repeatedly during past budget crises that governments must ensure public safety, pick up the trash, maintain roads and keep the water flowing — the basics, which include libraries. Considering the nature of the pandemic, with a virus that targets people with conditions such as diabetes and heart trouble, we would add parks and recreational activities to the list of essentials. Job losses could mean the city needs to help feed people.
What happens next is up to us — at least, that’s what Webber or any politician would have us believe. But if all these surveys said let’s eliminate cops, do you think the city would jettison its police department?
What happens next is a direct result of who we voted for, which is why these discussions should be watched by everyone who pays taxes. This is not about surveys. This is about decisions made by people who ran for office, and not just the mayor, every city councilor, too. This is where they earn — or lose — our votes.