More budget trouble for Wilmington

Workers could face layoffs and residents could see reduced services as more economic trouble is threatening the city.

Just a few months into the new fiscal year, and the city of Wilmington is already warning of layoffs or a reduction in city services if union workers don’t agree to salary and benefit cuts.

Mayor James Baker (D) issued a statement saying, “Unfortunately, we do not see any bright spots on the immediate economic horizon.  Because personnel costs represent 64% of the city’s budget, I am deeply concerned that some level of layoffs and service reductions will be warranted during the current fiscal year unless we receive significant salary and benefit concessions.”

In what seems like a déjà-vu from earlier this year, the city is asking department leaders to cut costs by at least $5-million.  Before presenting the FY 2011 budget this spring, Baker warned that as bad as the 2010 budget year was for the city, 2011 could be much worse.  (You can find an overview of the Mayor’s 2011 budget here.  Baker says, “Wilmington’s financial team worked with City Council this past spring to assemble a prudent and responsible budget that we believed could sustain itself for at least one year during which time we hoped the local and national economic outlook would have an opportunity to improve.”

That economic picture has not improved, and now the city says revenue will not be able to keep up with the costs to pay employees and keep city programs and services going.  Baker hopes to make up the difference in part by reducing costs during union negotiations currently underway.