Nov. sales tax slump casts cloud over city
Alarming figures will require wage cuts, mayor says
By Daniel J. Chacon, Rocky Mountain News (Contact)
Published January 13, 2009 at 1:52 p.m.
November sales tax revenues in Denver fell 5.9 percent compared with a year ago, and the city is expecting a drop for December, too.
Sales tax revenues through November are 2.5 percent over 2007 levels, but the city's budget assumed that sales taxes would grow 3.6 percent over the entire year.
Depending on consumer spending in December, sales taxes for 2008 may fall $8 million to $10 million below projections.
December figures won't be available until mid-February, but the city's budget director, Ed Scholz, didn't express a lot of confidence.
Scholz said that in 2007, there were four weekends in November and five in December.
In 2008, it was reversed.
"That means you're seeing a 5.9 percent decline on a month that had five weekends. In December, we only have four," he said.
"You take that as a concern that perhaps December will be down more than we expect," he said.
The slumping sales tax revenues - coupled with projections that overall revenues will be flat in 2009 - underscore the need for wage concessions from public safety employees and other cost-cutting measures as part of a plan to close an estimated $56 million budget gap this year, Mayor John Hickenlooper said Tuesday.
"The reason we've been working so hard over the last few months is we were worried that this is what might happen," he said.
"It validates that those planning efforts eight months ago, that that was time well spent," Hickenlooper said.
Neighboring cities are not doing any better. Lakewood said November sales taxes were down 6.9 percent. In Aurora, they were down 6.3 percent.
The Hickenlooper administration has proposed various belt-tightening measures to deal with the financial turmoil.
The mayor's plan includes asking the unions representing police, firefighters and sheriff's deputies to accept 2 percent less in wages than their negotiated contracts call for.
Their negotiated increases range from 4 percent to 4.75 percent. The proposed wage concessions would save the city $4.9 million.
Hickenlooper said he hadn't been updated on what was happening with his requested wage concessions.
"We have said to each of them (employee unions) that this is a citywide effort and that we are certainly hopeful that as part of our team, that they will do their share," he said.
The mayor's plan also includes saving $9.9 million by temporarily suspending bonuses for employees and holding their merit increases to 2.25 percent. That proposal was passed out of a City Council committee on Tuesday.
The mayor's plan also calls for $22.2 million in "operational savings," such as holding vacant positions open and cutting back on supplies and services.
The city is expected to release a detailed plan this week on how it hopes to achieve those savings.
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January 13, 2009
2:03 p.m.
Suggest removal
the_ripper writes:
Start with the DA.
January 13, 2009
2:26 p.m.
Suggest removal
jbowen43 writes:
Sales are lagging so we must cut wages giving folks less money to spend, resulting in lower sales, resulting in lower wages, resulting in lower sales, resulting in lower wages, resulting in....
January 13, 2009
2:28 p.m.
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75_hope writes:
I'm not to sure if I like what I hear. I dont know alot about economics but if they are going to put a ceiling on our wages or bonuses how is that going to help? That means more of us are not going out and spending our paychecks. It doesn't make sence... Can someone please tell me how this is going to help?
January 13, 2009
2:36 p.m.
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Triumph writes:
I didn't see any mention that Ole Hick is going to lead by example and take a wage cut also. The Police and Firefighters Unions will never agree to taking less wages. Hickenlooper wishes he had all that money he wasted on getting the DNC here and shouldn't all that supposed revenue generated from that "Historical" event have bought in the needed income to make up for Nov. and Dec?
January 13, 2009
2:40 p.m.
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CSU5280 writes:
trim the operating fat at DIA and use the profit to help with other areas and departments in the city.
January 13, 2009
2:54 p.m.
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Videobarbs writes:
I'm still wondering why the city needs 95 lawyers on staff. How about getting some young and eager "law clerk" students from the DU School of Law and trade off their work for the city for credit hours and cut out afew of the staff lawyers.
Also, where the heck is all the revenue we were supposed to have gotten from the DNC last August? I thought that was supposed to have taken in either $68 M or $168 M (sorry can't remember - but it was sold to us as being a hefty amount).
I'll cut our local leaders alittle slack because frankly I think we are in a "lite Depression" unlike any of us have experienced. On the bright side let me encourage everyone that we will make it through if we can be creative and flexible. Hang tough!
January 13, 2009
2:56 p.m.
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youngman writes:
What happened to all that money we made on the Democratic National Convention??????
Notice nothing about cutting employess like the private sector does..there has to be a lot of people just sitting around in the building depts.....and how over budget is the new Justice center?
Oh well..its only government....welcome to our new third world country status..get in line for a bailout
January 13, 2009
2:59 p.m.
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RockiesWin writes:
Hummmm.....let's ponder this for a moment.
Workers don't want to decrease the size of their RAISES. I guess the mayor will have to do the alternative.....layoff people.
How selfish these unions are. All they care about are their dues and how much money they can get out of the government.
Don't come here whining when you or your co-worker finds themselves unemployed.
January 13, 2009
3 p.m.
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timeandagain writes:
Maybe Hick should stop marketing Denver as a "Sanctuary City" for illegals? That would certainly save some cash... Also, where the final economic impact numbers for the "historic" DNC?? Must not have been all that good or we would have heard about them.
January 13, 2009
3:03 p.m.
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Macita183 writes:
If they are going to start cutting raises then it needs to be a global effort, not just for the police or firefighters. I don't know how you can give a huge raise to the DA and then ask the police/firefighters who put their lives on the line to take a cut. The mayor should lead by example and take a pay cut himself.
January 13, 2009
3:08 p.m.
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JP1985 writes:
The DNC helped, but the city has no doubt spent that extra money already. Any extra dollar they expect to come in has been spent, so there's rarely a surplus or stash of cash somewhere for times like these.
The key to individual financial success is to never run your personal finances like the government.
January 13, 2009
3:27 p.m.
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JINX writes:
There is always a reserve fund, the city does this every year. This tactic has become the status quo each year. The city cries that it doesn't have the money and that money has to be cut from the evil employee (union negotiated contract). Then low and behold, heres some money we didn't know about. You notice this comes before the tab on December sales and that the city refuses to show any of the unions the actual shortfall on paper. Like unions or not, they negotiated on a fair table and when they signed the contract, they undestood it would be fulfilled. Police, Fire and Deputies, stand firm and get what you deserve.
January 13, 2009
3:27 p.m.
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glowrock writes:
timeandagain, please shut the heck up already! I'm tired of you, you one-trick pony! Everything's the fault of illegals, everything's their fault! Sanctuary City! Sanctuary City! Do you even know what the heck that is? What exactly IS a Sanctuary City? Or is it simply some nonsensical phrase spouted out by those without a clue of reality???
January 13, 2009
3:44 p.m.
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denguy81 writes:
IF wage cuts are needed, then start at the top and work down. The top dogs make a hell of alot more then those at the bottom. Not to mention if the city is facing a $56 million gap in the city's budget, which i suscect we arent given the DNC brought an estimated $266 million in economic benefit to the Denver area. Of that total, The city of Denver alone drew about $154 million in overall economic benefit.
To quote the mayor directly, "The Democratic National Convention brought an estimated $266 million in economic benefit to the Denver area, far outstripping the city's initial prediction for the event's potential impact, according to a report released Thursday by Denver Mayor John Hickenlooper."
Then to add insult to injury the mayor gives the DA a 43% pay raise for DA over 4 years then has the audacity to ask others to take a pay cut. Pay cuts should be done across the board or not at all!
I personally would like to know where all that surplus of revenue went! I have a feeling that if we looked in the mayors pockets we would find it! Perhaps its time Denver found a new mayor, the one we have now seems to be more then a little incompetent for the job at hand!!!
January 13, 2009
4 p.m.
Suggest removal
cdmdenver writes:
RockiesWin writes:
Hummmm.....let's ponder this for a moment.
Workers don't want to decrease the size of their RAISES. I guess the mayor will have to do the alternative.....layoff people.
How selfish these unions are. All they care about are their dues and how much money they can get out of the government.
Don't come here whining when you or your co-worker finds themselves unemployed.
Denver city employees need to take a cut, 2% is not enough.
If people think their irreplaceable, think again!!
Nobody is immune, The only other way to get money for
the city coffers is "legal extortion" thats allready being done,
but does not provide enough revenue.
Firefighters and Police=REMEMBER PATCO!!
January 13, 2009
4:14 p.m.
Suggest removal
Noia writes:
I love how he words the statement: "2 percent less in wages than their negotiated contracts originally called for". Their contract is for a 2% raise. Why not just say "We want back what we promised them for the year."
Btw Hicky...are you giving back any part of that 5% raise you gave yourself?
Nice one Jinx! I just heard that the other day. Crying short fall but not wanting to show the books. That sounds more then a little suspicious.
January 13, 2009
4:26 p.m.
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Bonji writes:
Would you rather see the city fire workers, increasing the unemployment rate, or ask people to make wage concessions, saving jobs while also saving. I know people will have less to spend, but it will keep people employed which in my opinion is more important.
January 13, 2009
4:39 p.m.
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albanach writes:
CSU5280: You should get your facts straight before you write. DIA has tightened its budget and postponed a number of capital projects to save money during the past few years. And, by the way, the airport's "profit" cannot be used by the city government at large. The airport is an enterprise fund, meaning it earns its own money and spends its own money. It gets no support from the city's general fund.
January 13, 2009
4:51 p.m.
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HopiMedicineMan writes:
A 5.9 percent cut in revenues is substantial. That should mean an equivalent cut in expenditures. What jbowen43 and 75_hope don't understand, they're at the very end of the food chain as tax-supported employees. Paying them more will run out the city budget faster. They can't spend their raises fast enough in the economy to make a difference in their own salaries. It's like saying pay me my raise and I'll buy a car, which puts back in the system about a tenth-percent of the salary.
Imagine in your business if you could obtain your revenues not by this constant war of persuasion but by legal force? It's the businesses at the front end of the revenue chain who need to be encouraged, given incentives, reduced regulations. And who are they but basic industry, fuel and agriculture.
We're at the end of the controlled panic. Soon begins the real panic. I wish I had a cozy government job.
January 13, 2009
5:31 p.m.
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squeakywheel writes:
The little guy gets screwed again.
January 13, 2009
5:51 p.m.
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BDC writes:
Can someone explain to me how we go from making over $100 Million (plus) extra, to holding our hands out, in 4 months??? Where did that money go???
So, the Mayor gives his staff & cronies hefty raises, spends money like a drunken sailor on garbage like a 30' tall red phallus and $4 Million (that is not a type... I said MILLION) on artwork for the new jail downtown. How do they justify that spending??? What need is there for that much taxpayer money to be spent on art at a jail?
Maybe tax collections are down because we dont go downtown because the awful parking situation, the tax rates are higher than we care to pay, and we dont feel safe from the criminal element roaming the area. Do something about that Mr. Mayor, then maybe we'll start to spend our money downtown again.
January 13, 2009
8:43 p.m.
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Mike846 writes:
Yeah, you notice OTHER city employees aren't taking cuts, including the DA's, the Mayor and staffers. And I agree that if we weren't a Sanctuary city, we'd have more money for other things. As usual, the Democrat Party masquerades as the "little guys" party, the "labor" party, for elections, then promptly puts the screws to the little guy, the unions and the folks who's purchases REALLY support the city while siphoning money off for their pet social projects. Wise up, Denver voters. These folks are NOT your friends. Mike
January 13, 2009
9:18 p.m.
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Timberline writes:
A 2% cut is better than a 60% cut collecting unemployment.
January 14, 2009
6:31 a.m.
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SanctuaryCity writes:
Maybe you cut the illegal handouts in sanc city, the city would have a surplus. Denver is on the path of california where the illegals have bankrupt the state..OK Denver, you made your bed so sleep in it
January 14, 2009
7:35 a.m.
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mytwosense writes:
denguy81 writes: "IF wage cuts are needed, then start at the top and work down. The top dogs make a hell of alot more then those at the bottom."
I agree. It's hard to muster up much support for firemen, cops, and city workers already making modest wages to take a wage cut right on the heels of news headlines about the DA getting a whopping raise to almost $200K a year.
And I would imagine the former don't have a lot of savings built up to ride out this economic downturn. Certainly not compared to the high echelon wage earners, anyway.
Generally speaking, I like Hickenlooper, but I wonder about the priorities of his budget team when they push for raises for high profile employees, and within weeks are calling for wage cuts of low profile employees who are out there in the field every day actually getting the job done for the city.
And yes, what in the hell happened to the millions the city pocketed from the DNC?
January 14, 2009
2:20 p.m.
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glowrock writes:
Wow, more bullsh*t about sanctuary cities, illegals, and non-issues like DIA! This is productive, isn't it? Oh brother...
And for the record, the 1 percent requirement for art on public works projects can't be changed immediately. I don't agree with some of the artwork, but we're talking about $4 million spent on a $400 million complex which is paid off over 20+ years. Grand total on the artwork costs might be in the $200k/year range.
I swear, do people here even think before they type sometimes?
January 14, 2009
4:36 p.m.
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BDC writes:
" I don't agree with some of the artwork, but we're talking about $4 million spent on a $400 million complex which is paid off over 20+ years. Grand total on the artwork costs might be in the $200k/year range.
I swear, do people here even think before they type sometimes?"
OK, so now that you've said this, whether it's $200K a year or $4 Million upfront it will still add up to $4 Million. I still cannot see any justification for spending that much on artwork for a jail. How can you? Are you one of the people overseeing this project? Maybe one of the "artists" who's received a contract for this project? A place used to house criminals (accused and convicted) does not need that much art. Period.
Personally, I wouldn't put $200K into artwork for a jail but maybe that's just me. I can promise you that you'll NEVER (and I mean never) be able to justify spending $4 Million on artwork to the majority of Denver's citizens. It's wasteful and unnecessary.
"And for the record, the 1 percent requirement for art on public works projects can't be changed immediately."
Nonsense. I guarantee if the average citizen was aware of this and the calls started pouring in, our local officials would have a special vote to stop this waste of our tax dollars. Since it's not a well known fact, it will slip through unnoticed by most.
January 15, 2009
2:25 p.m.
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BDC writes:
Glowrock??? I'm still anxiously awaiting your explanation as to how $4 Million on jail art is any less wasteful because payments are spread out over 20 years, rather than the total sum being paid out all at once. Please enlighten us un-civilized savage types as to how this makes spending that massive amount any less wasteful. Thanks in advance.
January 17, 2009
1:42 p.m.
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BDC writes:
Seems that I'm not going to get my answer. Guess I can safely assume that Glowrock cannot justify spending that much money on jail art, whether in one large payment or over 20 years of installments.