Mayor Keller, city officials discuss 2021 economic outlook

Local News

ALBUQUERQUE, N.M. (KRQE) – Despite internal cut backs and revenue loss because of the COVID-19 pandemic, Albuquerque Mayor Tim Keller’s administration says on a relative basis, the city’s revenue picture isn’t nearly as bad as surrounding cities. The discussion comes as the city summarized its revenue outlook Monday ahead of an expected budget presentation later this week.

At a news conference, Mayor Keller said the city is still looking at cost cuts in nearly every department along with a continued employee hiring freeze. But with the addition of $150-million in federal funding, Keller says the city still isn’t close to laying off or furloughing workers or cutting their wages in the 2020 calendar year.

“Based on these numbers, we don’t feel those are necessary at this time, we’re going to use a combination of cost cutting, belt tightening, and then those federal funds and we think we’re going to be OK at least for the next six months,” Keller said. “We will reevaluate going into the next calendar year.”

Of the initial $150 million dollars the city received, Keller estimates the city has roughly $120 million dollars of federal CARES Act relief funding. The expects to use that funding throughout the rest of 2020.

The city estimates it lost $27 million dollars in gross receipts tax and other miscellaneous revenues to end the fiscal year 2020, which ended on June 30. Gross receipts tax accounts to nearly half of the city’s budget roughly $1 billion dollar budget.

Through June 2021 (the end of fiscal year 2021,) the city expects another decline in gross receipts tax decline for nearly 5%. That amounts to about $20-million fewer dollars the city has to budget with.

Alongside the remain CARES Act funding, Mayor Keller said Monday he believes the city can absorb the expected losses through more department cost cutting and a continued hiring freeze. and internal cutbacks.

“We’re looking at basically a six-month window,” Keller said. “We’re going to do a strong evaluation in December, and that’s probably the right amount of time to allow for us to plan, but also to allow for us to get some data, so we’re looking at December for tough decisions, if we’re got to make them or not.”

Keller says people may notice the effect on city government will be a slower pace of work.

“I would say they might notice small difference with respect to responsiveness and that’s really related to the hiring freeze,” Keller said. “We have less code inspectors than we’re supposed to have, we have less folks taking care of our parks than we used to, we have less folks picking up our trash than we used to have, we have less folks driving our buses than we used to have, so we are beginning to operate in an environment of resource shortage on purpose because of the hiring freeze.”

The mayor says he is also worried about what happens if federal lawmakers don’t pass another round of relief funding. Keller says if there are more economic closures over the next year, the city will need additional financial assistance to maintain its current operations.

“If things get worse, we’re going to desperately need money right away, so if there is a second wave in the fall, if this confluence of the flu and Corona hits in November, and we have to do more closing and so forth, we’re going to desperately need this funding,” Keller said. “I have signed on to multiple letters and made multiple phone calls to our delegation along with the other mayors in our country and our state asking for another round of stimulus, I think we’re going to need that in the long term or the short- term, we hope it’s for the long-term, but to have that it’s absolutely critical.”

Earlier this month, state lawmakers met to talk about the long term negative economic effects of the coronavirus pandemic in New Mexico. The Revenue Stabilization and Tax Policy Committee says the biggest impact the coronavirus has had on the state was the loss of jobs, especially those in the hospitality industry. About 687 businesses have closed in New Mexico since the start of the pandemic. Of those, 355 were permanent closures, and about 210 of those were restaurants.

The committee also mentioned the state is doing better than they anticipated when it comes to the state revenue and reserves. However, they cautioned tough decisions will still need to be made during the legislative session in January. This is a developing story, KRQE News 13 will provide updates as they are made available.

On Wednesday, Mayor Tim Keller is expected to give more specifics on what cuts the administration is eyeing over the next budget year. Any budget decisions will have to be approved by Albuquerque City Council. The mayor’s office said Monday its also projecting Albuquerque won’t see a full economic recovery until late 2024 or early 2025.

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