Squeezed by inflation, city budget keeps spending steady but trims ambition

Yahoo

2 days ago

Jun. 2—The Albuquerque City Council last month approved a $1.5 billion budget for the next fiscal year, largely accepting Mayor Tim Keller's proposals and continuing his priorities on housing, homelessness and policing.
The 6-2 vote followed months of meetings and was one of the final steps to fund the local government for the next 12 months, starting in July.
But the budget documents outlined concern about the future and the mayor's introduction letter cites "significant uncertainty, attempting to keep up with rising inflation, economic disruptions, and bracing for federal cuts."
"I wish we'd had more to work with," said Councilor Renée Grout, who led the council's budget-building efforts. "I'm hopeful that this year, our revenues will pick up and that we'll have some extra funds, and we'll be able to do a mid-year clean-up and get a better raise for everybody."
Revenue — where all the money comes from
Albuquerque's economic outlook significantly affects the city's budget.
That's because the collection of gross receipt taxes, or GRT, makes up about 40% of the city's total resources and about 70% of the general fund, which finances many of the city's core functions.
The budget notes that uncertainty caused by the Trump administration's tariff policies, alongside the possibility of escalating wars in Europe and the Middle East, could affect future revenue, particularly as those things impact the price of oil and global supply chains.
It also states that Albuquerque is still feeling the economic aftershocks of the COVID-19 pandemic. For example, the budget said that retail and wholesale trade, an industry that has historically comprised about 25% of the city's GRT, has struggled to grow under pressure from inflation, lingering from the pandemic and reaggravated by the Trump administration's economic policies.
This budget also allocates $4.6 million of the historic opioid settlement money to nonprofits, part of a council-approved plan to distribute money to nonprofits that help people recover from addiction. That money comes from a settlement between local governments and pharmaceutical companies, and follows a joint plan established by the city and Bernalillo County.
Higher raises for city workers stall
One of the final budget flashpoints revolved around pay increases for employees.
The mayor's proposed budget called for a 2% increase for all city workers. The council added another 0.5% increase. That raise does not apply to firefighters since their contract was renegotiated last year.
Some of the money being used to fund the increases comes from about $1 million in savings after the city was released from the Court Appointed Settlement Agreement and the decade-long oversight of the city's police department. The settlement was reached after a Department of Justice found a pattern of excessive use of force within the police department.
But for some on the council, 2.5% wasn't enough.
Councilor Klarissa Peña pushed for the council's 0.5% increase to be 1%.
"I think 1% across the board is important to our employees and the services that they provide," Peña said. "They're the ones that keep the parks clean, and they're the ones that keep all the other services going."
But that money would have to come from somewhere, and some on the council felt it was shaving away at council priorities. Peña's plan called for cuts to after-school programs, employee early retirement and some vacant positions.
Ultimately, Peña's efforts failed on a 4-4 tie vote, leading the councilor to vote against the budget.
The top-funded departments
The approved Albuquerque Police Department budget of about $274 million, about a 2% increase, took the largest portion of the general fund budget.
Despite that, police funding was a point of contention.
In one of the most high-profile moments of the process, APD Chief Harold Medina verbally sparred with Councilor Louie Sanchez during a presentation on May 8. Sanchez, a former police officer who is running for mayor, said that APD and Keller's administration were inflated.
Sanchez reiterated that concern May 19.
"We have an over-bloated administration as it is," Sanchez said. "I think if the administration would actually realize and make some cuts where cuts need to be made, I think that these people (city staff) could be funded."
Sanchez ultimately voted for the budget, but another councilor who raised concerns about police funding did not.
Councilor Dan Lewis criticized the administration for eliminating police officer positions, despite Medina saying he could not fill them this year. APD can have up to 1,100 officers, but the upcoming budget will only pay for 1,000.
APD currently has around 900 officers and aims to reach 1,000 by the end of this year, Medina said.
"This budget cuts police officers," Lewis said, "and has no vision for hiring any more police officers."
The mayor's office defended the move by reiterating Medina's point about staffing.
Kevin Sourisseau, the city's chief finance officer, also said the council has told the administration they don't like seeing money for vacant jobs sit around undisbursed.
Other top-funded departments and initiatives include Albuquerque Fire Rescue, which was budgeted for $128.6 million.
General obligation bond debt service, which pays back bonds for capital projects, was budgeted for $97.4 million.
The Municipal Development Department, which oversees public works projects, was budgeted for $50.6 million