It’s there on the proverbial Double Doppler, the storm of the economy blowing toward Tacoma. Forecasters know it’s getting worse, but aren’t sure if its going to come ashore as a gale or a hurricane.
The latest report from the city’s finance department says the tax-supported general fund, which pays for things like police, firefighters and libraries, was down $7.1 million at the end of April from what was initially budgeted. That’s a growth of 50 percent from the $4.7 million shortfall seen at the end of the first quarter.
"We’re trying to stay ahead of it," City Manager Eric Anderson said in an interview Tuesday. "We’re making careful adjustments based on quarterly financial reports. I don’t want to be Polyanna-ish or Chicken Little."
Anderson previously recommended battening down the hatches with $11.7 million in spending cuts, realized throughout 2009 and 2010. They include things like not filling vacant staff positions, reducing travel and training, postponing purchases and cutting back on subscriptions.
These cuts would be made under a four-tiered plan that ranges from quick, easy items to Level 4 – a "Katie-bar-the-door Great Depression."
For now, Anderson is implementing Level 1 and Level 2 cuts to minimize impacts to city services.
Are we headed for Level 3? Anderson said he didn’t know:
"We’ll go to Level 3 when we’re forced to. We’re not there yet."
After waiting to see how the second quarter bears out, Anderson will be making another report to the City Council in July with recommendations on how to proceed.
"What we don’t want is to overreact in any direction," he said. "We need to do this in a way that does not reduce the capacity of city governments to deliver city services and reach strategic goals."
The shortfall in the $440 million two-year budget for the general fund includes $5.5 million in decreased revenue and $1.6 million in unanticipated spending.
One bright spot is that about 1 million of that spending includes items that were budgeted to be purchased last year, so money from the previous budget can be appropriated to cover them, Anderson said.
The hit to the general fund also comes at a time when the city is spending an additional $2.2 million from the fund on salaries following a compensation adjustment to bring non-union employees onto a market-based pay scale. A previous set-aside will reduce the actual impact to $365,000, officials have said.