The Associated Press
Updated: May 19, 2020 07:12 AM
Created: May 19, 2020 06:27 AM
SANTA FE, N.M. (AP) — New Mexico’s capital city is forecasting a budget deficit of $100 million in the upcoming fiscal year that city officials say is the result of economic fallout from the coronavirus outbreak.
Santa Fe Finance Director Mary McCoy said Monday during a virtual news conference that the expected deficit was unprecedented.
“Practically overnight we’ve been confronted by a structural imbalance... where the city’s recurring expenditures are far higher than our recurring revenues,” she said.
It remains to be seen how the city plans to make up the shortfall, and officials declined to say how residents and city employees might be affected, the Santa Fe New Mexican reported. The projected gap for the upcoming fiscal year follows an estimated $46 million shortfall in the current fiscal year that triggered furloughs and spending and hiring freezes.
Mayor Alan Webber said he didn’t want to make any predictions to unnecessarily alarm employees or residents.
“The city of Santa Fe will be fine,” he said. “We’ll just have to be a lot smarter, more creative, more flexible and adaptive as we continue to deal with this unprecedented budget shortfall.”
The projected deficit for the upcoming fiscal year that begins July 1 includes an estimated $31 million shortfall in the general fund, which McCoy called the “meat and potatoes” of city government because it pays for day-to-day operations.
The city has been working with economists at the state and other organizations to help understand how they are estimating revenues in this uncertain time and what to expect for Santa Fe economy. McCoy said the estimated revenue shortfall of $100 million is the most likely scenario, but Webber said things could be even more grim.
“There is a worst-case estimate, which would be triggered by a second wave infection (of COVID-19) that shuts down the economy again,” Webber said. “That could mean a $150 million budget shortfall across all funds.”
For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. But for some — especially older adults and people with existing health problems — it can cause more severe illness, including pneumonia, and death.
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