ABQ should make living within its means top goal

Plenty of Albuquerque families would be happy to have an extra 3 percent in income to spend in the new year.

While frugal families balance their budgets as a matter of selfinterest, the city is legally required to operate with an annual General Fund budget in which the revenue and spending sides of the ledger are equal.

City officials are projecting a $24 million shortfall for the next fiscal year that begins in July, but it’s still early in the budgeting process. And, it should be noted, that “shortfall” contemplates an increase of 2.8 percent in city revenue, or about $14 million dollars.

While the bean counters in City Hall predict an increase of 2.8 percent in revenues to pay for basic city services, they also project that the city is on track to spend 2.9 percent more next year.

Pretty close. And it’s not like revenues are down. So why are some councilors floating the possibility of raising taxes? Taking a long-term view, Council Budget Committee Chairman Don Harris said, “It’s going to be difficult. We’re cutting to the bone. Eventually, we’re going to have to take a look at revenue.”

Gross receipts taxes are the main source of revenue for the General Fund, although property taxes, fees levied on utility companies that operate in public rights of way and other sources contribute.

In addition to the general gross receipts tax, the city already has two special gross receipts taxes in place — one for public safety and one for improvements to the popular BioPark, where a new river otter exhibit is under construction. Operating costs for the otter exhibit and a new penguin exhibit, both expected to open later this year, represent a small part of the predicted shortfall. Together, the new exhibits are expected to cost about $359,000 a year to operate.

One significant factor is the loss of revenue as a result of the Legislature in 2013 approving a state tax cut that phases out state funding to cities and counties. It was designed to make up for revenue the entities had lost when the Legislature foolishly did away with the gross receipts tax on food in 2004 under thenGov. Bill Richardson. Losing that so-called “hold harmless” adjustment will mean a reduction of about $6.5 million in the next fiscal year, about $2.3 million more than this year.

Also in the mix are $3.1 million needed to cover a 1 percent pay increase for city employees, $1.6 million for more police officers, $2 million for more fire department staffing, $3.3 million for rising health care costs and $3.1 million to beef up the fund that pays outof-court settlements. In one six-year period, settlements used up $28 million of the fund, mainly as a result of lawsuits filed against the city over police actions. Other factors besides the new zoo exhibits include about $7.3 million for new firefighter and rescue unit operations and maintenance of new streets, parks and software.

The projected operating budget shortfall is the largest in six years, although far lower than the post-recession shortfall Mayor Richard Berry inherited. He says the current shortfall may not turn out to be as drastic as predicted and the city should be able to handle it without layoffs, furloughs or tax increases.

The mayor will offer a plan by April 1 and city councilors have two months to make adjustments.

Back to those families and their budgets. After years of stagnant economic growth, few raises and higher than the national average unemployment in New Mexico, most families would be glad to have an extra 3 percent to play with. So should the city.

It should also live within its means — instead of talking about passing along a growing wish-list to taxpayers.