Phoenix leaders are being asked to approve a city budget Tuesday that could change drastically.
The proposed budget that starts July 1 represents no cuts to services and $1 million more in spending than the current fiscal year. But even with a decision in early April to freeze hiring of nonessential employees and postpone vehicle replacements for non-public-safety employees, City Manager Ed Zuercher expects more cuts will be needed early in the fiscal year.
In a report to the City Council, Zuercher wrote: "These cuts may be mitigated by our federal Coronavirus Relief Fund, but we still expect some fiscal pain ahead.”
By mid-July, Phoenix should have sales tax data from March through May, along with better projections. More than 30% of the city’s $1.4 billion general fund comes from sales tax revenue.
Special revenue and enterprise funds are also taking a hit. Enterprise funds represent money generated through user fees and cover departments like aviation, water and solid waste. In late March, Jim Bennett, the city’s aviation director told the council that business at Sky Harbor Airport had plummeted and said, “this will be the most severe shock the airport has ever experienced.”
If, on Tuesday, the council approves the proposed budget, which assumes the downturn ends in July, the action will initiate a posting period required by law before the council formally adopts the budget in June.
The new spending is split two ways: $400,000 to launch the Office of Accountability and Transparency and $600,000 to hire 911 dispatchers.
