Mayor John Hickenlooper, having been a restaurateur, often looks at the business of city government much the same way as he does the hospitality business.
When times get tough, you have to to cut costs in ways that are least objectionable to your customers. If you’re dishing up seafood linguine, do you cut back by two shrimp or leave out the crab altogether?
The mayor didn’t put it exactly that way when he visited the editorial board of The Denver Post last Friday to talk about the city’s latest budget shortfall, but that’s the theme he repeatedly hit on: How can the city cut expenses in a way constituents will accept?
Facing a $70 million shortfall next year — on top of $56 million in cuts already made — city residents should expect to see many options being floated in the coming months.
It’s likely the cuts will be felt across the city and it’s incumbent upon residents to make an effort to have their voices heard as the budget process gets under way.
Ideas already have begun to circulate, including paying for garbage pick-up, as many suburban residents already do. We think that’s likely to go over like a lead balloon.
Even if residents were to ante up, say, $10 a month, it would raise $30 million, well short of closing the $70 million gap. There would have to be other cuts in 2010 general fund expenses, roughly projected to be $950 million.
More than 70 percent of city general fund expenses are for personnel. City employees equate to city services. So if you cut employees, you cut services.
So what can you do without? Should the city cut back hours in recreation centers or libraries or close down some facilities entirely?
It’s possible the city could get unions to agree to reopen negotiations and take wage or benefit cuts. Given the rocky nature of discussions thus far, it could be an uphill battle, but it’s worth exploring.
The threat of across-the-board layoffs might encourage them to reopen their contracts. The mayor already did that with Denver sheriff’s deputies.
The city, like so many governments across the state and the nation, is being hit hard by sales tax revenue declines. Part of that is due to the recession, but another force at work is structural.
Over the last three decades, Denver saw some jumps in sales tax revenues attributable to population increases. More people means more purchases. That has leveled out, yet city expenses increase reliably by 4 to 5 percent just for wage increases and the cost of benefits, such as health insurance. The mayor assured us that he hasn’t added staff during his tenure. In fact, he said the city has fewer workers than when he took office in 2003.
Sales tax revenue also has been affected by the expansion of Denver suburbs, which are chock full of shopping opportunities. All of this together hurts Denver, which relies on sales tax revenues for about half of its income.
The city will face difficult choices over the coming months as it tries to deal with the fallout from a deep recession and some longer-term budgetary issues.
We hope Denverites will make it a point to speak up about their preferences.
