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Cuts to services, possible layoffs options Phoenix will have to consider as COVID19 impacts city government

Posted at 2:41 PM, Apr 03, 2020
and last updated 2020-04-05 08:14:45-04

PHOENIX — Seventy-eight percent of the revenues generated by the City of Phoenix come from sales taxes.

With many businesses closed, that money stream is virtually dried up.

"What we're seeing now is a shutdown or stoppage. We are getting very little sales tax revenue in at this point and time," Deputy City Manager Jeff Barton said.

On Thursday, Barton outlined a brutal budget forecast for 2021 in a teleconferenced planning meeting with Phoenix Mayor Kate Gallego and City Council members who sheltered in place.

If COVID-19's impact lasts through July, Phoenix is looking at a $26 million deficit. If it extends to October, the deficit would be around $56 million. By December, it rises to $79 million and if it were to last the entire year, the city would be $128 million in the red.

"The majority of our costs exists with our personnel, our people costs, our staff costs," Barton said. "Because of that, it's going to be very difficult to balance the budget without impairing city services or the pocket books of our city employees."

The last thing city council members want to do is lay off city workers.

Councilwoman Laura Pastor (District 4) wanted to know if employees can be moved to different departments where there may be openings to save them from being laid off.

"I am just saying," Pastor said. "We need to start thinking this way in order to maintain our staff at the levels we have them."

Neither Barton nor his boss, City Manager Ed Zuercher, can make any promises about avoiding layoffs.

Phoenix already instituted a freeze on spending and non-essential hiring.

Councilman Jim Waring (District 2) asked if the formation of the new Citizens Review Board, which will have the power to investigate police, and is budgeted for $3 million can be delayed.

Councilman Carlos Garcia (District 8) wondered if Phoenix can postpone its obligation to pay for upgrades at the Talking Stick Resort Arena as part of its deal with the Phoenix Suns.

Options the City Council may get to consider on Monday, when it sees what a shrinking 2021 budget looks like, and what potential cuts will be needed in order to balance it.