Wilmington Mayor warns of possible job cuts

Layoffs could be looming for Wilmington workers at the start of 2011.

The leader of Delaware’s biggest city warns that layoffs could be looming for city workers as early as the start of the new year.  The mayor made his comments as the First Person guest on First on WHYY.  The interview can be seen on line all week.  First airs Friday at 5:30 and 10pm, Sunday at 11am and Monday at 5:30pm.
As the first quarter of Wilmington’s fiscal year comes to a close, Wilmington Mayor James Baker says the city’s economy is not recovering as quickly as he had hoped.  Despite spending cuts and increases in fees and taxes over the last few budget years, the city’s fiscal standing is still stagnant.
Baker says, “We’ve done all those things that your supposed to do.  What I told our people was we were going to try to avoid layoffs.”
But last month, city offiicials said they had to borrow 10-million-dollars to pay salaries and benefits for workers, now the layoffs Baker had tried to avoid are back on the table.  “We might have to do it in January instead of waiting until the end of the year with the budget and all that.  So, it’s not good.”  Baker has also asked all city departments for their ideas on how to cut five million dollars from the current budget.
Earlier this week, Baker asked city council members to a tax ordinance approved late last year.  The tax on “S” corporations was designed to collect unpaid wage tax revenue from businesses that passed on their corporate income, losses, deductions and credit through shareholders for tax purposes.  While that was the goal, a number of businesses threatened to move out of the city if the tax wasn’t repealed.  Baker says, “I don’t know if the threats are real, but I will not take the chance of losing businesses and further weakening the city’s fiscal base.”  Baker has asked the Wilmington Economic and Financial Advisory Council to examine the “S” corporation tax issue and make recommendations on how to address the issue in the future.