Farmington faces uncertainties as it works to balance its budget
AZTEC — Farmington is facing a lot of uncertainty as it prepares its final fiscal year 2021 budget.
“No one knows whether we’re going to fall further,” City Manager Rob Mayes told the City Council on July 14 in a meeting that can be watched on fmtn.org/agendacenter. “No one knows whether the last quarter’s indicative of the next year.”
The city relies on gross receipts tax for more than 60% of its revenue. GRT is similar to a sales tax.
Mayes said the fourth quarter of fiscal year 2020 saw a 10% reduction in GRT revenue from the previous year. The GRT revenue for the fourth quarter reflects sales during the restrictions put in place to reduce the spread of the coronavirus that causes COVID-19.
“In this budget plan, we are planning for the ability to be able to manage up to a 20% reduction in GRT,” Mayes said.
That would lead to a nearly $12 million deficit.
Farmington is calling that scenario “moderately optimistic.”
“We really are still in a financial crisis,” Mayes said. “We don’t have any idea really of where this ends.”
New Mexico had begun the process of reopening and lifting business restrictions. Then cases began to increase and, earlier this month, the governor announced that some of the restrictions — such as banning indoor dining — would go back into effect.
It is unclear how long the restrictions will remain in place or what the lingering impacts of the pandemic will be.
The Farmington City Council will see a department-by-department budget presentation during an all-day work session on July 21.
The city will use $5 million from cash reserves to balance the budget for fiscal year 2021, which began July 1.
It has also drastically cut staffing primarily through attrition and every department has seen at least a 10% reduction in its operating budget.
Mayes said that means the departments have fewer people and resources to accomplish their tasks.
While the city has made cuts to balance the budget, Mayes said some of these cuts are not sustainable.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at email@example.com.
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