DALLAS - Phoenix plans to slash spending by another $100 million, the largest such cut in the city's history, to balance a budget hit by falling revenues amid one of the nation's most serious economic declines.
Among major cities, Phoenix has seen some of the greatest losses in the value of its homes.
City manager Frank Fairbanks told officials that every department could see funding reductions of 15% to 60%. The latest cuts come just four months after Phoenix cut spending by $90 million, or nearly 8%.
The City Council will meet today to consider where the cuts should come. They expect to make the decisions within two weeks.
The city will hold two weeks of public hearings after the budget cuts are released on Jan. 6, with the reductions going into effect March 2.
Phoenix has trimmed spending six times in the past eight years, lowering the general fund by about 15%. More than 1,000 jobs have been eliminated in five years.
Sales tax collections were down 7% in July and 7.3% in August. September figures are coming this week.
Another blow to the city could come from the postponing of a $1 billion university construction program that included Arizona State University in suburban Tempe. ASU and the state's other two major universities, the University of Arizona based in Tucson and Northern Arizona University in Flagstaff, also have facilities in Phoenix.
Gov. Janet Napolitano said she plans to challenge the legislative committee's decision not to review the construction program, a required step before it can go into effect. The program was shelved because lottery revenues that were to back bonds for the construction have declined, and legislative leaders feared that the revenue might be needed for other programs in an economic crisis. Ironically, one purpose of the construction program was to boost an ailing economy.
Arizona economist Elliott Pollack recently told state and local officials that measurements of the economy are the worst he has ever seen, including retail spending and job growth compared to other states.
Pollack said that a surplus of 55,000 to 75,000 houses on the local real estate market means that next year may be just as bad. Migration to the area has also slowed and the state is now one of the worst in the country for job growth.
Arizona fell from second in job growth in 2006 to 22d last year and 46th as of August, according to Census figures. Metro Phoenix is 27th out of 34 major metropolitan areas of one million or more.
"This, for us, is unchartered territory," Pollack said. "It's far worse here than most places, and in the 39 years I've been doing this, this is the first time I ever had to say that."