Cities nationwide feel economic meltdown
Vail, CO Colorado
PHOENIX ” The palm trees in many Phoenix neighborhoods will be left shaggy this year. The city can afford to prune the trees only on major streets.
There’s also no money for children’s tee ball, or soccer, baseball or flag football. No money for a free shuttle service for the elderly. No money for most inner-city “fight back” programs that tackle blight.
Around the country, the mortgage crisis and the slumping economy are causing tax revenue and investment returns to plummet, forcing cities big and small to cut expenses.
“You’re going to start to see across-the-board cuts in services,” said Chris Hoene, director of policy and research at the National League of Cities. “Every service ” police, fire, libraries, recreation ” will see some cuts. And you start to see layoffs. You won’t see the same number of police on the streets.”
At the center of the financial meltdown, in New York City, officials expect 165,000 job losses overall in the next two years, including as many as 35,000 in the financial services industry. Mayor Michael Bloomberg ordered all city agencies to slash spending by $500 million now and $1 billion for fiscal year 2010. The city also is mulling new ways to raise money, like putting ads on the sides of garbage trucks and street sweepers.
In New Jersey, Gov. Jon Corzine is warning hundreds of cities and towns to start teaming up and combining essential services or face a reduction in state aid.
In Chicago, Mayor Richard Daley plans to lay off more than 900 city workers and eliminate nearly 1,350 vacant jobs to help cover a $469 million shortfall. Daley’s budget also increases taxes on parking and sports tickets and gives city workers three unpaid days off around the holidays ” the day after Thanksgiving, the day before Christmas, and the day before New Year’s ” to save $20 million. That’s on top of numerous tax increases already imposed.
“The little man, the worker bees are totally forgotten,” said Paula Chiano, 51, a court reporter in Chicago and a single mom. “Everything is harder.”
In Oakland, Calif., an estimated $42 million deficit has Mayor Ron Dellums proposing shutting down City Hall one day a week, eliminating 84 city jobs, imposing hiring freezes and cutting other services.
Brad Walters, a circulation manager at the Oakland Public Library, said the library will cut programs for the disabled and elderly, its bookmobile and its literacy programs.
Walters, president of a municipal employees union with about 2,000 full-timers, said closing the city one day a week means he and his members will lose 20 percent of their pay. “I lose 20 percent of my pay, I can lose my house,” he said.
Towns across the Midwest already reeling from a spike in the price of road salt say the downturn in the economy will mean more snow on the roads this winter. “People won’t be able to expect to drive on a road in the dead of winter that is completely clear of snow and ice,” said Watertown, Wis., Mayor Ron Krueger.
In the Seattle area, King County is making cuts to offset a projected $93 million budget deficit. The cuts will mean fewer sheriff’s deputies patrolling the county, staffing cutbacks at the courts and less spending on public health, including a program that helps women who are HIV-positive and pregnant find doctors and get counseling.
Even wealthy cities are feeling the pain. Aspen, Colo., will delay construction of a $360,000 foam pit for training snowboarders in the city gym.
“We have a lot of gold and silver medalists from the X-Games who live and train here, so that’s going to have to go,” said Aspen Mayor Mick Ireland.
Economists say that communities with close ties to the financial sector such as New York City and Charlotte will probably suffer the worst. Cities reliant on auto manufacturing like Detroit will have a tough time as well. Phoenix, Las Vegas, Miami and other areas that saw home values rocket will also struggle as the real estate market cools.
Philadelphia, on the other hand, is cushioned somewhat by its many hospitals and universities, which are resistant to swings in the economy, said Moody’s Economy.com senior economist Ryan Sweet.
Communities near military installations and defense contractors also will do well, since federal contracts tend to run for a few years, said Steven Cochrane, managing director at Moody’s Economy.com. Similarly, the Washington, D.C., suburbs in Virginia and Maryland may continue to prosper because of their many research and development firms and their large population of federal employees.
“This is where all the government bureaucrats live,” University of Maryland economist Jeffrey Werling said. “They don’t tend to get laid off. Those guys, they’ll do fine.”
Up to now, communities from Texas to Colorado that are heavily tied to the energy sector have prospered from the run-up in oil and gas prices. But oil prices are plummeting, and those cities and towns could suffer too.
Phoenix didn’t get hit by the mortgage crisis ” it got slammed. For years, the city has been going through a building boom that turned desert into housing developments and strip malls. It is now looking at a glut of unsold homes.
Last fiscal year, Phoenix’s tax revenue fell $89 million short. So the city doubled the cost of swimming lessons at city pools to $12 per session and eliminated 250 baseball games at one park. It left it up to homeowners to pay for the pruning of palm trees. And it ended a shuttle service that took the elderly and disabled to the grocery store.
City Manager Frank Fairbanks said Phoenix must slash up to $250 million more by March to make ends meet. This time, the cuts will sweep across the city’s most essential areas, including police, fire, libraries and services for senior citizens.
“There’s just no choice,” Fairbanks said. “With all the cuts we’ve made in the past, I don’t think there’s anything left that someone in the community doesn’t highly value.”
Associated Press Writers Deanna Bellandi and Sophia Tareen in Chicago, Carrie Antlfinger in Milwaukee, Kristen Wyatt in Denver, Evelyn Nieves in San Francisco, Dave Porter in Trenton, and Manuel Valdes in Washington contributed to this story.
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