Macon headed for major cash shortage

America’s shattered economy is catching up to Macon: The city faces a $2 million shortfall at the end of this budget year if new spending cuts are not made soon, Mayor Robert Reichert and officials from his administration told city council on Tuesday.

The city must cut $400,000 each month for the next five months, said Reichert, who told the council he will return in the coming days with specific recommendations for how to do so. But he more or less said that salary savings must be achieved. He suggested that may mean a reduction in pay or some type of furlough program for city workers, who might be asked to work for nine of the 10 days in each pay period.

“We’re going to have some pretty difficult decisions to make,” said the mayor, urging the council to be expedient with the process once he suggests how the cuts should be made. The longer the city waits to trim its expenses, the more will have to be taken out each month as the end of the fiscal year approaches, he said.

“It is not a pretty picture for any of it,” Reichert said.

Tom Barber, the city’s finance director, said financial problems that had been looming on the horizon firmed up in the past few days when the most recent sales tax report came in.

Sales tax revenue has been down for two months in a row from where it was at this time last year, he said, indicating a trend that could continue for some time. City officials are planning to be short $200,000 a month from what they were expecting in tax revenue for the rest of the fiscal year, he said.

On top of that, the city is overrunning its fuel budget and has less salary savings from vacant positions than it has had in previous years, he added.

“It’s very likely that we’ll be upside down this year,” Barber said.

Aside from cutting salaries or positions, the city has about $6 million in cash that it has saved over the past few years. But officials have been wary of drawing it down because the account represents only a small portion of what they say Macon ought to have set aside for emergency use, and they want to build stronger reserves.

Macon also set aside in this current budget about $7 million in excess SPLOST funding. But there has been debate over how it can be spent.

Still, council members asked the mayor to make sure he looks at every option available to him. Anything that adversely affects city workers is not likely to go over well politically.

“The cuts ought to start at the top,” said Councilman Charles Jones, telling the mayor he should be prepared to take a reduction in pay as well. “Don’t ask other folks to do what you’re not going to do yourself.”

Councilman Alveno Ross also urged a “holistic” review of the city’s options. He said the city should first look at what capital expenditures could be cut or where fuel usage can be reduced before employees are asked to surrender their pay.

“I think there are some painful decisions to make,” Ross said, “and they are taken with a priority over human sacrifice.”