A significant drop in sales tax revenue may require Phoenix to reduce its bus system’s $171 million annual operating budget by $16 million in fiscal 2011 to avoid an operating fund deficit. 

Lauri Wingenroth, the city’s assistant director for public transit, told the Citizens Transit Commission last week that the bus system is struggling to keep service at current levels.

She said the 0.4% sales tax for transit approved by voters in March 2000 is not bringing in the revenue anticipated. The tax was expected to generate $21.4 million in August and September, the first two months of fiscal 2010, but instead brought in only $14.3 million.

Officials are considering a reduction of $16 million in the fiscal 2011 transit budget, or phasing in $17 million to $18 million of cuts over two or three years. The City Council will develop the fiscal 2011 budget in the spring.

Wingenroth said Phoenix could reduce the anticipated deficit by delaying planned capital projects and by seeking additional federal funds.

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