|
This is what happens when you give millions of dollars in corporate welfare to professional sports teams????
Glendale budget looking bleak $35 million hole could spur tax hikes, layoffs by Cecilia Chan - Apr. 13, 2012 09:58 PM The Republic | azcentral.com Glendale may raise taxes, cut programs and lay off 52 employees to close a projected $35 million shortfall in the upcoming budget, according to a staff proposal released Friday afternoon. The shortfall represents a quarter of the $144 million in the city's projected ongoing general-fund operating revenue. The budget gap exists despite an expected revenue increase for the first time since the recession hit. The city expects a 4 percent increase in general-fund revenue, largely from state income-tax and city sales-tax hauls. But the city must grapple with an estimated $20 million that would go toward management of the city-owned Jobing.com Arena, the home of the Phoenix Coyotes. Mayor Elaine Scruggs did not immediately respond to a request for comment, although she said earlier this week that she believes the management fee should be closer to $11 million. The City Council will weigh in on the proposal Tuesday. Glendale resident Ken Jones, a vocal critic of the city's spending, was concerned. "We certainly can't have layoffs like that because we decided to be a sports mecca," he said. Through the economic downturn, the city has largely avoided layoffs and dramatic service cuts by eating through its reserve. The city's reserve funds dropped from $72.5 million in the 2005-06 budget year to $11.7 million five years later. Moody's Investors Service earlier this year downgraded the city's bond rating, noting that the city's shrinking reserve and the financial pressure from the hockey team. Glendale borrowed millions to open the arena nearly 10 years ago as a hockey and concert venue. The city has been fighting to hang onto its main tenant since the Coyotes were led into bankruptcy in 2009. The budget proposal assumes the team will stay, with the arena-management fee. City staff members recommend closing the gap, in part, with an increase in the city's sales-tax rate of 0.8 of a cent beginning in August. The proposed hike would sunset in 2017. The increase would take the city's sales tax to 3 percent, which would be among the highest in the Valley, comparable to Carefree, Cave Creek, El Mirage and Buckeye, according to a city budget document. The figure does not include county and state sales taxes. Staffers estimate the sales-tax hike would generate between $23 million and $26 million, depending on whether the council opted to tax groceries. Along with raising revenue, the proposed budget would cut $8 million in expenses, which includes the elimination of 88 full-time equivalent positions. The proposal indicates 52 of the positions are filled and 36 are vacant. The Public Works Department would take the biggest hit with 23 layoffs. Parks and Recreation would see 15 layoffs, which includes employees from the Adult Center and youth and teen programs. The Fire Department would slice a proposed $221,000, although no filled positions would be lost. The Police Department would cut $1.7 million, including 10 vacant police-officer positions and four filled positions in the civilian emergency-management department. Despite the elimination of positions, the budget does not call for employee furloughs for the first time in four years. Tuesday's all-day budget workshop begins at 8:30 a.m. in the City Council chambers. |