Mayor Swearengin: Swift Adjustments are Necessary to Address Potential $27.8 Shortfall in 2010-11 Budget

Mayor Ashley Swearengin today said that while the City of Fresno’s current fiscal year budget remains in balance, the city must make swift adjustments to address a potential $27.8 million shortfall in next year’s budget.

“There is little, if any, good news in our budget situation,” Mayor Swearengin said in a quarterly budget presentation to Fresno City Council. “Like most other cities in California, we are continuing to experience a significant decline in revenue.

“While our current budget remains in balance, it would be irresponsible to put off difficult budget decisions to next year’s budget. We must begin now to make additional cuts so that we have 18 months to address our revenue shortfall instead of just 12 months.”

Mayor Swearengin said the potential $27.8 million budget hole is the result of an $18.2 million decline in revenues and a $9.6 million increase in expenses, particularly a drop in sales tax revenue and an increase in retirement costs. Specifically, those factors are:
• A $13.3 million decline, both actual and anticipated, in sales tax;
• A $4.9 million decline in business, room and other miscellaneous taxes;
• A $7.2 million increase in retirement costs; and
• A $2.4 million increase in debt payments, primarily for the No Neighborhood Left Behind program.

Mayor Swearengin said the City Manager’s Office and Budget Office already have begun a thorough process to make sure budget cuts are “prudent and responsible.” City departments will begin to work on their budget-reduction plans tomorrow. After thoroughly reviewing and modifying those plans, Mayor Swearengin said her goal is to have a final budget reduction plan by Nov. 19, which will be presented to Council.

All changes are expected to take effect by January 2010.

Mayor's Budget Message to Council - October 22, 2009 Video