Lakewood – The Lakewood City Council on Monday reached consensus on two 2006 budgets – one with deep cuts based on the current 2 percent city sales tax and the other with restored services if voters pass a 3 percent sales tax in November.
“This has been a tough year, because we’re talking about people and we’re talking about programs,” Mayor Steve Burkholder said.
If voters turn down the tax hike, 72 city jobs will be cut, all outdoor pools will close, 70 parks will be mothballed, Lakewood Rides for seniors and disabled people will end, and the city won’t have money to bring a $1.5 million federal match for the West Colfax Avenue and Simms Street intersection.
If the tax is approved – providing an estimated $16.7 million in additional revenues – the city could fatten reserves and avoid those cuts.
Half of the increase would be used for public safety, street maintenance and construction, and parks and recreation.
The other half would maintain city services and the emergency fund.
Officials also said they could restore previously cut programs such as school resource officers and neighborhood planning and provide about $7.8 million more in street resurfacing projects.
The city has been faced with finding more than $10 million in cuts, with about half coming in 2006 and the rest in 2007.
Every program and service not required by law has been up for discussion during 19 council meetings.
“I can’t think of a topic that has been more discussed than the budget,” City Manager Mike Rock said.
Public hearings have been scheduled for Sept. 12 and 26 on the 2 percent sales tax budget.
If voters approve the hike, first reading on the alternative budget will be Nov. 28, followed by a second reading and a public hearing Dec. 12.
Rock said the city, which derives 54 percent of its budget from sales and use taxes, has been caught in the worst economic downturn since the 1980s.
Finance director Larry Dorr defended the city’s revenue forecasts, which have been noted by budget critics.
Lakewood was about $1.3 million short of actual revenues, but that was better than most metro-area cities, Dorr said, and most of the shortfall can be attributed to items out of the city’s control.
While sales tax receipts are forecast to grow 3.7 percent next year, overall tax revenues are down, such as the 7 percent decrease in the city’s cigarette taxes and the 10 percent decrease in motor-vehicle use tax seen this year.
Costs have increased, including a 13-percent-a-year hike in medical premiums for city employees over the past four years.
Because of lower tax revenues and rising costs, the city has cut its budget each year for the past five years and is seeking the city’s first sales tax increase since 1971.
Staff writer Ann Schrader can be reached at 303-278-3217 or aschrader@denverpost.com.
