Mesa meets more modest budget shortfall with relief - East Valley Tribune: Mesa

Mesa meets more modest budget shortfall with relief

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Posted: Thursday, March 31, 2011 3:04 pm

For the first time in years, Mesa residents likely won’t face cuts to library hours, shrunken public safety staffs or other painful reductions to city services.

A weak economic recovery has helped the city’s finances enough that Mesa is only facing a $7.4 million deficit next year. City officials almost embraced that kind of shortfall Thursday when sharing the news with the City Council, noting that they’ve slashed $110 million in spending since 2006.

“I would say it’s a big relief, frankly, from what we’ve had to make in the past,” City Manager Chris Brady said.

Many programs and more than 300 staffers were cut in recent years. Brady doesn’t anticipate any more layoffs. The City Council will review what might be on the chopping block in a series of hearings this month.

Mesa initially thought this fiscal year would improve its finances more significantly, with consumer spending bringing in more sales tax. But spending only picked up in the last three months, which had made officials fear a more dire picture until the turnaround.

While Mesa is facing a shortfall for this budget year and the following year of $32.8 million, it is offsetting it with $25.4 million in one-time savings.

The city still faces several challenges. Revenue from the state based on property values continues to plummet, as the income lags behind two years. Also, potential federal cuts could threaten Community Development Block Grant funds, which could affect 23 employees who do code enforcement and neighborhood outreach.

And the Legislature is contemplating cuts to impact fees that would limit what Mesa can charge new developments. Mesa and other cities would have to hike utility rates for all residents to offset the costs of growth, Brady said.

“This is a great windfall for a developer,” he said.

The city will hike homeowners’ secondary property tax bill this year, but the average homeowner will pay about the same amount. A typical home pays $62.52 now, but falling home values will trigger a rate increase so the total income stays the same.

• Contact writer: (480) 898-6548 or ggroff@evtrib.com

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