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Furloughs, Job Cuts To Balance Denver Budget

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Mayor Michael Hancock at Tuesday's budget announcement (credit: CBS)

Mayor Michael Hancock at Tuesday’s budget announcement (credit: CBS)

DENVER (AP) – Denver Mayor Michael Hancock announced Tuesday that the city will cut nearly a hundred vacant jobs, and employees will take furlough days to balance a $100 million shortfall in the 2012 budget.

Hancock said the measures will prevent service reductions at libraries, recreation centers and other facilities. But his administration cautions that about half of the savings are one-time fixes, meaning the city will likely start with a $50 million budget deficit in fiscal year 2013.

The majority of the savings, $62.4 million, comes from consolidating services and cuts, such as the elimination of 95 city jobs, 90 of which are vacant. No layoffs are expected because employees will have the chance to apply for other city jobs, said Ed Scholz, the city’s deputy chief financial officer.

Cutting the city positions will save $12.4 million. Personnel is an area of the budget that has recently taken a huge hit. Since 2009, the city eliminated 750 jobs, or about 7 percent of its workforce. About 80 of those came from layoffs.

“This is a lean budget and it is not without pain or sacrifice,” Hancock said in a statement.

Five furlough days will save $5 million. About $10 million in savings will come from consolidating the office of cultural affairs into theaters and arenas.

The City Council will vote on the budget Nov. 14.

Improved revenue projections and revenue enhancements, like fee increases and recreation centers and a tax amnesty program, give the city $37.6 million to meet the shortfall. The amnesty program to allow people behind on their taxes to pay the city without facing penalties will generate about $2 million.

Scholz said Denver is still recovering from the Great Recession and seeing revenue growth below the city’s historical averages. Revenues are projected to grow about 2.2 percent this year and 2.1 percent in 2012, Scholz said.

“So we still have slow revenue growth,” he said, adding that 2012 revenues are projected to be $80 million less than where they were estimated to be without the recession.

Hancock, who took office on July 18, had little time to come up with the proposed budget. His predecessor, interim Mayor Guillermo “Bill” Vidal, had identified $75 million in cuts before he left office. That included the elimination of city jobs and the department consolidations.

The proposed $931 million general fund budget for 2012 is $50 million higher than the 2011 budget.

- By Ivan Moreno, AP Writer

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

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