City Faces $14 Million Budget Shortfall
EL PASO, Texas — El Paso’s city budget shortfall is growing. Right now it looks like the Sun City is down about $14 million.
City officials said there is no cause for alarm. But right after that, they were quick to say that they may have to dip into the city’s reserves for the first time in five years.
About $4 million of it is falling sales tax revenue, which due to the struggling economy dropped more than nine percent in December.
Also down are international bridge revenues. Fewer people are crossing, which may also be impacting sales tax revenue.
Fewer people are paying their traffic fines as well. Projected revenue is down about $1.7 million in that area.
Mayor John Cook said after Tuesday’s meeting that despite a hiring freeze and falling gas prices, which will help make up for some of the shortfall, Council may now have to dip into the city reserves for about $2.5 million.
The city hasn’t done that since 2004. But Mayor Cook hopes that the economy will turn around in time to avoid that.
“It looks like a turnaround is already in place. Sales tax revenues here have started to come back in the direction we wanted them to. I feel pretty confident we’ve probably seen the worst of the recession in El Paso,” he said.
