Santa Fe’s proposed budget assumes economic recovery

It’s night and day for Santa Fe’s budget.

The city is preparing for a year of big spending after an economy that relies heavily on the tourism industry struggled during the first year of the COVID-19 pandemic.

City officials unveiled Monday a proposed $348.6 million budget for fiscal year 2022 — a 9% increase over the previous year — with significant investments in areas that faced cuts last year.

The announcement comes as COVID-19 cases in Santa Fe and New Mexico remain comparatively low and out-of-state visitors are starting to return in greater numbers.

“We are committed to the continuation of many of the things that kind of had to be put aside during COVID,” Mayor Alan Webber told reporters Monday.

That includes a 4% pay raise for city employees, investing millions in affordable housing and funding some positions that were previously frozen during the pandemic.

It’s a far cry from the financial quagmire the city found itself in at the onset of the pandemic.

Pandemic-related closures forced much of the City Different’s tourism-reliant economy to shut down for months, causing city coffers to start hemorrhaging funds. City Hall implemented temporary furloughs that cut some employees’ pay as much as 16%.

Webber said the current pay raises and funds invested in employee health care attempt to address how difficult the past year was for many employees.

“It’s a very good recognition that last year was punishing for everybody,” he said. “We’re coming out of it and we hope to be able to show that with these pay increases and health care benefits.”

And while it’s an optimistic outlook for the city, Finance Director Mary McCoy said a spike in cases and subsequent restrictions need to be considered, as well.

“That is definitely a downside risk that we are monitoring … in the coming months of the next fiscal year,” McCoy said.

Still, McCoy said the current budget is crafted on the assumption that economic recovery will continue and not regress due to a spike in cases.

The projected revenue still falls $22 million short of pre-pandemic figures and the city does not expect a full recovery within the next fiscal year.

The City Council will begin a series of budget hearings on Tuesday.