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Archive for Tuesday, October 22, 2002

Weak economy may put pinch on city budget

Hiring ‘chill’ already in effect in face of lower sales-tax collections

October 22, 2002

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The city has managed to take in more taxes than it has spent so far this year, but Budget Director Ed Mullins is worried a sluggish economy will make that task more difficult the next few months.

In a quarterly financial report he will deliver tonight to the Lawrence City Commission, Mullins said low interest rates and sales tax collections along with the state budget crisis could leave city coffers thin in the final months of 2002.

"There are signs of weakening consumer spending, which will not bode well for fourth-quarter retail sales," he said in his written report, noting the city saw an unexpected $100,000 drop in sales tax receipts in September.

"If the decline in sales tax distributions continues, (city) departments will be requested to reduce their expenditures," Mullins wrote. But "the real impact is likely to be felt in 2003."

In a separate memorandum to commissioners, City Manager Mike Wildgen noted city officials have tried to save money this year with a hiring "chill" to slow the pace of worker replacements in city departments.

"This helps us maintain control in the 'personnel' portion of each fund's budget," Wildgen wrote, "which is typically the area of greatest expenditure."

Wildgen said commissioners might want to reconsider some programs planned for 2003.

Commissioners will hear the report at their meeting, which starts at 6:30 p.m. at City Hall, Sixth and Massachusetts streets.

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