CITY OF TUCSON

ME D IARE L E A S E
FOR IMMEDIATE RELEASE

Contact: Mike Letcher Date: December 15, 2009

City Manager TDD: (520) 791-2639
Office: (520) 791-4204 Page: 1 of 3

STRATEGIES BEING CONSIDERED TO BALANCE CITY BUDGET

With economic conditions worsening for local and regional governments, City staff are

presenting strategies to the Mayor and Council to address projected budget deficits for this year and the

next.

At today’s Study Session, City staff outlined possible options to eliminate a nearly $32 million

shortfall for this year’s $421 million General Fund budget, which ends June 30, 2010.

The current fiscal year budget problem is a result of the continued economic recession. The City

of Tucson is susceptible to this recession due to its reliance on sales tax collections to fund services. As

an example, in fiscal year 2007, City sales tax revenues were $202.3 million; for fiscal year 2010, they

are currently projected to be $155.5 million. This is a 23% reduction in three years. Population and

demand for services have increased in this timeframe. For general operations, the City collects only 3%

of revenues from property taxes, which is a less volatile source.

“Every option is on the table to address this problem. Core services remain a priority, but they

are not immune to reduction,” said City Manager Mike Letcher. “We know, too, that residents are very

concerned about the impact these decisions will have on the future of our community. But delaying

action now will only compound the magnitude of the problem.”

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Strategies to reduce budget deficits for the remainder of this fiscal year and the next could

include reduction or elimination of General Fund subsidies for discretionary programs; increases in

certain fees and taxes; additional debt restructuring; reduction of the City’s workforce; and changes to

employee compensation and benefit policies.

Like other municipal governments, the City is not able to reduce its general fund deficit by

transferring money from restricted sources such as federal grants or highway user revenue funds, or

from its enterprise departments of Water and Environmental Services.

Further details will be presented to the Mayor and Council on Tuesday, January 5, 2010, by the

City Manager. Implementation of new policies or ordinances would follow immediately.

Dialogues held with the public this past fall were helpful in gauging community priorities for

City services and options for addressing the budget situation. Results of the dialogues have been

provided to the Mayor and Council and are posted on the City’s website at

www.tucsonaz.gov/dialogues.

Additional meetings are scheduled with City employees, funded organizations, and community

stakeholders, and information will continue to be posted to the City website to keep all parties informed.

A copy of Tuesday’s PowerPoint presentation to Mayor and Council, “Budget, Revenues, and

Cash Position Update,” has been posted in Hot Topics on the City’s website at www.tucsonaz.gov and

has been included with e-mail distribution of this media release.

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