Santa Fe is bracing for significant budget cuts expected to affect employees and residents

While layoffs should be considered only as a last resort, everything is on the table – including reductions in salaries and benefits, City Councilor Roman “Tiger” Abeyta, chairman of the city’s Finance Committee, said


Everything is on the table – including reductions in salaries and benefits, City Councilor Roman “Tiger” Abeyta, chairman of the city’s Finance Committee, said.


By Daniel J. Chacón
The Santa Fe New Mexican

Santa Fe, N.M. — The city of Santa Fe is bracing for significant budget cuts expected to affect employees and residents alike.

As the economic mess of the COVID-19 crisis oozes into the city’s balance sheet, officials are scrambling to assess the damage and plan for the 2021 fiscal year. While layoffs should be considered only as a last resort, everything is on the table – including reductions in salaries and benefits, which account for 66 percent of the city’s general fund budget, City Councilor Roman “Tiger” Abeyta, chairman of the city’s Finance Committee, said Thursday.

“It’s going to be tough,” he said. “It’s going to be really, really tough.”

Mayor Alan Webber and City Manager Jarel LaPan Hill did not respond to requests for comment about the city’s finances or budget plan for the upcoming fiscal year, which begins July 1.

“We are reviewing available data and our overall financial situation and anticipate making recommendations and announcements early next week,” Kristine Mihelcic, the city’s constituent and council services director, said late Thursday.

Chris Armijo, a representative for AFSCME Council 18, the union that represents the bulk of city employees, said budget discussions are ongoing behind the scenes.

“We did have a conference call with the mayor and his staff [Wednesday] – we’re looking at cost savings,” he said, adding another meeting was scheduled Thursday.

City Councilor JoAnne Vigil Coppler said City Hall will have to take a “broad look” at all the services it provides.

“I’m not looking forward to any of this discussion, but on the other hand, it’s one of the most important discussions I think we have to have,” she said.

Like Vigil Coppler and Abeyta, City Councilor Jamie Cassutt-Sanchez said city officials will work hard to avoid layoffs.

“We don’t want to disrupt the livelihoods of individuals,” Cassutt-Sanchez said.

The types of cuts the city will have to make remains to be seen, she said.

“One thing that I think is going to be really important for every member of our community is to be thinking about, ‘What do we really need from the city?’ ” Cassutt-Sanchez said.

Santa Fe County also is planning for a financial hit but hopes to keep services intact through other budgeting measures.

The county is projecting a “possible revenue decrease” of $27.1 million total, including a 30 percent drop in gross receipts tax revenue, or $17 million, according to a budget presentation from Tuesday’s county commissioners’ meeting. The county, which has a current operating budget of nearly $142 million, projects a 10 percent decrease in property tax revenue, or about $6.8 million.

“Due to the financial crisis that has resulted due to the global health emergency, there is no standardized guidance with which to project a feasible [fiscal year 2021] budget for Santa Fe County,” the presentation states. “The Finance Department will use past experience from the latest recession with which to build next year’s budget.”

Abeyta said the city knows the budget will be affected but the extent remains unknown.

“We get monthly disbursements of GRT [gross receipts taxes], but they lag two months behind, so we won’t see the impacts of this until we start getting the May, June and July payments because that will be for March, April and May,” he said. “We’re kind of right now just shooting in the dark. Is it going to drop 50 percent? Seventy-five percent? I feel confident in saying that [it’s going to be significant] just seeing how everything is shut down completely.”

City Councilor Carol Romero-Wirth said the Finance Committee will work closely with the mayor and finance staff “to understand our revenue levels and what will need to happen as a result of anticipated declines.”

“Although our reserves have been healthy, there will be cuts,” she wrote in a text message. “The situation is serious and difficult because we don’t know how long our pandemic posture will last.”
Abeyta said he anticipates reductions in salaries and benefits.

“Since I’ve been on council, we’ve been talking about our health insurance plan,” he said. “Our consultant has been telling us, ‘Here’s what everybody does, here’s the Cadillac of plans and here’s the city’s,’ which is like way above, so that’s an area I think that we have to stop talking about and finally do something with because we’ve always known this was going to be a problem.”

Abeyta said he wants to compare the city’s health insurance plan to those of other governments and “mirror those.”

Budget planning this year stands in stark contrast to last year’s, when the budget for the $102 million general fund, which pays for day-to-day government operations, included pay raises for employees.
“It’s going to be difficult to try and cut the budget without having some kind of impact on salaries and benefits,” Abeyta said.

While the mayor is ultimately responsible for submitting the city’s budget, Abeyta said he has asked the other members of the Finance Committee to review last year’s budget to try to identify potential cost-cutting measures.

“For example, I’m asking the committee to start gathering questions they may have, like with hiring freezes,” he said. “Have we ever done that? What are the pros and cons to doing something like that? How much could we potentially save?”

Cutting overtime expenses also will help with the city’s budget woes, Abeyta said, adding unpaid furloughs for the city’s workforce of about 1,400 should also be considered. He noted the city’s hands might be tied in that regard because of union contracts.

One of the city’s biggest challenges is that police and fire make up a big portion of the city’s budget, Abeyta said.

“When you look at police and fire and how dependent they are on the general fund, it’s pretty steep, so when you talk about cutting, you have to look at public safety,” he said. “Can you afford to cut there? If not, then you have to cut other places like public works, parks and rec, land use, finance, community service. It’s going to be a juggling act.”

Mary McCoy, the city’s finance director, recently said the state Department of Finance and Administration allowed Santa Fe and other local governments to submit their current budgets as a placeholder for the upcoming fiscal year.

“By July 31, I think, we have to submit an amended budget, which is good because by then we’ll have reports for March and April and even possibly May, so we’ll be able to know what the deficit is from the shutdown,” Abeyta said.

The extension will also give the city more time to develop a budget proposal that has been thoroughly vetted, he said.

“In this case, the later the better because the later you do it, the more information we have, and we know exactly what revenues look like,” Abeyta said. “But on the flip side, the sooner we can start making cuts, the better, because we know there’s going to be a problem.”

Abeyta emphasized layoffs should only be considered as a “last recourse” but said the extent of cuts will depend on revenue numbers.

“You know what’s ironic? For like the last year, year and a half and up to even our last quarterly report, we were booming in every sector. Our GRT was way up, higher than what we had budgeted,” he said.

“We were gangbusters. The economy really was doing as great as people at the federal side said it was, and the state, and then for it to just crash, that’s crazy.”
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