Salt Lake City, already walking a fiscal tight-rope since passing this year's budget, would face even greater challenges if three tax initiatives pass, Mayor Palmer DePaulis said Thursday.
Figures released by the city show it could lose $13 million in revenues upon passage of the initiatives to limit property taxes, roll back a 1987 tax increase and provide tax credits for parents with children in private schools.That's more than five times the $2 million in cuts the city endured this year during an "excruciating" budget process which infected city police with the "blue flu," and forced 30 employees from city payrolls, DePaulis said.
Following a property tax increase two years ago and the addition of a garbage collection fee last year, DePaulis and the City Council avoided a tax increase this year, leaving a lean budget to work with.
But despite a mayoral veto of the the city's budget and other difficulties, this year's budget process was "a picnic compared to what a tax initiative would do," DePaulis said.
DePaulis said he is considering holding a public hearing before November balloting to discuss which city services would be cut. The hearings would allow voters to go to the polls adequately educated, he said.
Meanwhile, the city will be collecting data from City Council staffers, budget analysts and finance department officials to draw up specific figures on where the cuts would be made, DePaulis said.
The analysis would result in a "contingency plan," or an alternative budget forecasting impacts from the initiatives, DePaulis said, hoping that such a plan would not be necessary but acknowledging the city must be "far-sighted."
The city expects $13 million in reduced revenues if the initiatives pass, DePaulis said. Roughly $10.7 million would come from the city's general fund while half the city's separate library budget, $2.3 million, would be eliminated.
Another $500,000 to $800,000 might be lost in gasoline taxes, which are important for maintaining city infrastructure, he said.
In the event the initiatives pass, the city could raise license fees, user fees and other revenue-raising fees to offset some of the revenue loss, DePaulis said. But the city could not expect to completely account for all losses through such measures, he said.
So, the city must consider making budget cuts, DePaulis said.
"You'd have to look at everything, all services, across the board," he added.
Public safety would remain a high priority and immune from cuts at all costs, DePaulis said. But citizens possibly could expect closure of a fire station, which brought harsh objections this year during budget negotiations.
Additionally, infrastructure such as the city's crumbling bridges, jail expansion and implementation of the Regional/Urban Design Assistance Team study could be jeopardized by cuts, the mayor said.
Tax initiative supporters have accused public officials of employing "scare tactics" when they cite areas of potential impact. But DePaulis said it was his "professional and personal responsibility" to identify cuts.
"I don't buy that argument," he said of initiative supporters crying foul. "It's just an emotional response."