MEMPHIS - Memphis could lay off as many as 1,400 workers to close a projected budget shortfall next fiscal year, a prospect Chief Administrative Officer George Little called "Armageddon."
According to The Commercial Appeal, Mayor A C Wharton's administration is anticipating a shortfall of anywhere from $20 million to $70 million next year. The actual amount will depend on how much the city pays toward the $55 million it owes Memphis City Schools.
After the city council cut $57 million from its annual schools contribution in 2008, the school system sued and won. Since then, two courts have ordered the city to pay up. The district filed suit again this month over the unpaid bill, asking a judge to force the city to pay.
The administration hopes to pay the bill in installments, but if forced to pay right away, cutting workers is one option to balance the budget.
Since taking office, Wharton has generated several proposals to pay the debt and fund the budget. They include tax increases, layoffs and wage reductions. The administration also could restore the 18 cents to the property tax rate the council returned to taxpayers in 2008 when it cut school funding.
Little said if Memphis' budget hole turns out to be around $20 million next fiscal year, the city could balance the budget by laying off about 330 workers and not increasing taxes. If the shortfall is closer to $70 million, as many as 1,400 employees would need to be laid off for the city to fill the hole without a tax increase.
Either way, Little said the administration does not plan to lay off fire and police personnel, as some other cities have done.
Council Chairman Myron Lowery said it is too early to panic over the dire predictions.
"These numbers are preliminary and may change when the mayor presents his official budget to the full council," he said.