Faced with a sagging real estate market and falling tax revenues, Mayor Sheila Dixon is exploring ways to cut expenses, including a hiring freeze for all city agencies.
The freeze ? one of several ways to cut city spending ? began in November and extends to all non-essential employees, said Sterling Clifford, spokesman for the mayor.
“We have reason to be confident there will be less revenue; how much of revenue decrease we don?t know yet,” he said. “Until we get a clearer picture, we are holding the line on staff.”
Overtime expenses have also been cut across the board, including a 22 percent drop in police overtime spending this year.
Officials have been tight-lipped about the state of city finances, declining to release exact figures on how deeply the now-sagging real estate market has affected revenues.
But economists said a cooling housing market has hit the city hard, particularly in the lucrative area of recordation and real estate transfer taxes.
“Recordation and transfer taxes are like freemoney for the city. They generate revenues without creating a countervailing need for services,” economic consultant Anirban Basu said.
The city projected it would collect $100 million in transfer and recordation taxes in the current fiscal year.
Meanwhile, members of the city council said in addition to taking a hard look at current expenditures, the city may have to contemplate halting the annual 2-cent decrease in the property tax.
“We might have to stop decreasing the property tax if things get worse,” Councilman Robert Curran said of the city?s five-year effort to cut the city property tax rate ? the highest in the region ? by 10 cents.
Concerned that the council was not getting enough information on how deep the decline is in tax revenues, councilman Jack Young, chairman of the city?s budget committee, said he is planning to meet with finance officials.
“We need to be prepared, because I think it?s going to be tight,” Young said.
Union leaders also weighed in, demanding a meeting with city officials.
“I have concerns; if there?s a hiring freeze, they should meet with us,” said Glenn Middleton, the head of the city employee union that represents 4,200 employees in the department of Public Works and transportation. “There should also be a freeze on consultants and contractors too,” he added.
