Decreased sales tax revenues hurt city
Memo regarding sales tax revenue decrease and possible shortfall
 / Danielle Leigh
COLORADO SPRINGS, COLO. -- More budget cuts could be on the way for Colorado Springs.
Fox 21 has received a city wide memo indicating they may be looking at a 14 to 17 million dollar shortfall.
The city has already made about 24-million dollars in budget cuts for 2009.
According to a memo sent out by the Colorado Springs City Manager, they may have to cut up to 17-million dollars more.
The memo indicates the shortfall is largely because of a lack of sales tax revenue at the end of 2008.
The main problem is that people are buying less.
At the end of the year, retailers expect to see their sales increase, and the city counts on that sales tax revenue.
But, in October the city saw a 12 percent decrease in sales tax revenue and because of that the city is having to rethink its budget for 2009.
The city did expect a 4 to 6 percent drop in sales tax revenue, but Fox 21 obtained a memo sent out by the city manager indicating the drop was much worse, leaving a shortfall of about 14 to 17 million.
"This economic downturn is worse than anything we have ever seen in the city," said Vice Mayor Larry Small.
The memo goes on to suggest each department consider areas to cut back.
"Our cuts are getting really deep now, and our first concern is for the public. There is going to be an impact," said Small.
For safety reasons the city can't cut back more than a couple million dollars on fire, police, and public works services. So other "less essential" departments will suffer.
"There are some programs we may have to eliminate. It may impact our senior centers, our community centers, our youth programs, our transit system. We are in danger of losing our park vegetation because we simply won't be able to water," said Small.
Friday, the city manager will be releasing a report regarding the sales tax revenue for November.
If people bought more, then the city may not have to decrease their budget by the projected 14-17 million, but if the sales tax revenue went down they could have to decrease it more.
As of now the city isn't making any decisions as to exactly where they're going to make those cuts.
They are waiting for a more detailed report and plan of action from the city manager in late January.
Other minor reasons for the shortfall include higher than anticipated health insurance claims and a reduced road and bridge levy.
The city says it will do its best to impact residents as little as possible.