Sales-tax revenue in Denver plunged by 8 percent in January compared with last year, forcing Mayor John Hickenlooper to require city employees to take an unpaid furlough day this month.
The steep decline could end up forcing the administration to revise revenue projections downward again and force a new round of budget cuts. Already, the administration had projected stagnant sales-tax revenue for the year and had come up with a plan to close a projected $56 million budget gap for the year based on that scenario.
Sales-tax revenue is a crucial indicator because it represents about half of the city’s income. The city collected $2.5 million less in sales tax revenue this January than it did in January of last year.
“The big question is whether we will end up being 8 to 10 percent down in sales-tax revenue every month for the rest of 2009,” said Ed Scholz, the mayor’s director of budget and management. “If that happens we’re going to be way off the mark.”
The union that represents sheriff’s deputies rejected the mayor’s request that it agree to reduce deputies’ pay or benefits this year by 2 percent.
The rejection by the union leaves the mayor scrambling to come up with another $1.2 million in cost savings beyond his original plan to close a projected $56 million gap.
“We have limited options in terms of how to find that savings,” said Kelly Brough, the mayor’s chief of staff. “Our goal has been to minimize the potential for layoffs. I don’t know what we’ll end up doing with the sheriff’s deputies, but we will come up with a plan.”
Brough said the sheriff’s department still will have to absorb $1.2 million in cuts somehow.
Mel Thompson, the city’s deputy safety manager, said he will meet with top mayoral aides Monday to go over plans for the sheriff’s department. He said layoffs are a possibility.
A sheriff’s sergeant, who asked that he not be identified, said many deputies hope the impact of any layoffs could be minimized by moving people into newly created civilian positions that pay less.
He said the deputies are upset because the city recently spent money building a new kitchen to prepare meals for inmates, but now the administration is asking for people to accept less pay and is considering layoffs.
Brough said the administration still is negotiating with the unions that represent firefighters and police officers to find ways to reduce their negotiated contracts by 2 percent.
Officials with the union representing sheriff’s deputies declined to comment on their decision against reopening the negotiated contract.
They confirmed, however, that they sent a letter to deputies and to the administration this week outlining their rationale. The letter states the deputies made concessions in 2003 and had been able to obtain recent pay increases only by undergoing binding arbitration.
It states that the union does not believe “the city has taken the necessary steps to demonstrate that it is in any type of financial distress for the year 2009.”
The mayor said in an e-mail he sent to city employees Friday that all but public-safety workers will have to take a furlough day March 27. Each furlough day ends up saving the city about $1 million.
Hickenlooper said in the e-mail that he also had identified three other potential furlough days.
Christopher N. Osher: 303-954-1747 or cosher@denverpost.com
