'A new economic reality'

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'A new economic reality'

By Glenn Burkins – March 30, 2010

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Mecklenburg residents should brace for major cuts in county services and a dramatically leaner school system – possibly for years to come.

That was the assessment delivered Tuesday when County Manager Harry Jones and Charlotte-Mecklenburg Schools Superintendent Peter Gorman spoke jointly to a group of about 50 residents in west Charlotte.

Addressing the Tuesday Morning Breakfast Forum, Jones and Gorman minced no words in describing the pain county residents and employees will feel.

With tax revenue down in nearly every category, Jones and Gorman said layoffs and cutbacks are unavoidable.

“We believe that we have a new economic reality that we’re dealing with,” said Gorman, who has proposed cutting up to $80 million from the CMS budget year that begins in July. That would include laying off about 600 teachers.

“Last year we told folks we’re going to do more with less,” he said. “This year I think we need to be upfront and tell folks we’re going to do less with less next year.”

Jones was equally bleak in his assessment, saying the county’s revenue picture is the worst he has experienced. Of all the major categories of county income, he said, only property taxes showed a slight increase.

Jones has asked county departments and agencies to come up with $95 million in cuts for 2010-11.

He blamed the county's budget problems primarily on Charlotte's 12.8 percent unemployment rate. With so many people out of work, he said, shoppers are not spending, builders are not building and businesses are not expanding.

Jones said economists recently advised county officials that it could take five years or more for the area’s unemployment rate to return to pre-recession levels of 5 percent.

“There are going to be some really tough choices,” he told the group. “Some of you in this room will likely know some people who will be told that their jobs are at risk, and I’m just going to be very candid about it.”

Jones said more than 500 county workers will probably lose their jobs.

All of the easy cuts, or the “low-hanging fruit,” Jones said, were all made in the current year’s budget.

“There is going to be a significant reduction, a significant curtailment in services,” he said.

At CMS, which has a $1.2 billion budget, Gorman said, the school system has cut or re-directed more than $250 million since 2006-07.

“You cannot take a quarter of a billion dollars out of a budget of a little over $1.2 billion and expect the same results,” he said. “We will not be able to provide the same services or the same supports or the same access to kids next year as we have in the past... It’s not happy. It’s not cheery. It’s not an attempt to say, oh, it’s the county’s fault. This is us saying we have a new reality we’re dealing with right now.”

During a question-and-answer session, Gorman and Jones addressed issues including:

Building more jail space
Given the county's current budget needs, Jones said he would not recommend going forward with jail construction next year.

Pay cuts versus layoffs
Jones said county staff has been asked to look at the potential impact of 10 percent pay cuts for county employees. That would save about $25 million, he said, but would still leave a $60 million budget gap. Gorman, who does not support across-the-board pay cuts, said a 10 percent cut at CMS would save about $60 million but could have legal ramifications.

The CMS Achievement Zone
Gorman said he would soon present a proposal to the school board concerning the future of the Achievement Zone, but he declined to discuss it Tuesday. (The Achievement Zone is a group of low-performing schools that receive extra funding because of high poverty and low test scores.)