A Gap Looms in Phoenix

Phoenix may have to draw on its $32 million budget stabilization fund to make up for a revenue shortfall in fiscal 2009, which ends today.

City manager Frank Fairbanks, who has announced his retirement, said sales tax revenue from January through May totaled $144.5 million, about 8% less than expected. Revenue total for June won’t be available until late July.

The city’s May sales tax revenues totaled $27.9 million, almost $3 million less than expected.

A hiring freeze was implemented in 2008, but Fairbanks said layoffs may be needed if revenues remain sluggish.

Fairbanks said Phoenix’s economy will revive as projects funded by federal stimulus dollars get under way.

Stimulus spending will include $53.2 million for public transit, $36.4 million to restore an eight-mile stretch of the Salt River, $35.4 million in street projects, $22 million for state highway projects in the Phoenix area, and $10.5 million for work at Phoenix Sky Harbor Airport.

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