With the $4.56 billion projected state budget deficit, cities across the state will be facing some tough decisions in order to get by. Rural cities in particular are vulnerable to the decisions for they rely heavily on the Local Government Aid (LGA) they receive from the state.

In Austin, LGA accounts for more than 60 percent of city operating expenses and any reduction will have a significant impact on the city.

Because Gov. Tim Pawlenty signed a pledge stating no tax increases would be made during his campaign, cuts to all areas of state spending, including LGA, have become inevitable. In his last visit to Austin, Pawlenty said the amount of LGA cities receive will depend on the level of need. The governor will have to find venues to balance out a $356 million deficit by June when the fiscal year ends.

In light of these pending cuts Austin's mayor and city council members have begun to prepare for the cuts from the state level and are anticipating the governor's budget announcement in mid February.

Even thought the city does not know how drastic the cuts will be, the mayor and council members already are looking at ways to deal with expense cuts.

"My goal is to keep the city moving and going. Tightening up and making cuts where we have to but also being prudent," Mayor Bonnie Rietz said.

The city is looking at capital projects that can be put off until later, for a matter of months or even years until "more definite" numbers are in.

An informal hiring freeze is in place. Vacant positions, because of retirements or resignations, are not being filled.

A third approach has been asking department heads to hold any purchases in their department. If there happens to be a specific project that is needed, the council would make decisions on a project-by-project basis.

"I don't want to slash and burn projects, that's not the method I want to use," Rietz said. When a program is cut completely, it is hard to start them over once economic times improve, she explained.

"We are going to look at all the facets of what we do," said Tom Dankert, city finance director.

Because only so many paper clips, pens and pencils can be cut, the city will have to look at the 62 percent of personnel cost and benefits and how to best alleviate that cost, Dankert said.

Dankert said, as the finance director of the city, his goal is "to make sure, in the next couple of years, maybe three, to steer the council to work on a balanced budget so the revenue is coming in and the expenses are going out."

For council member-at-large Wayne Goodnature, his goal is to try to make the necessary cuts with no tax increases.

"The magnitude of cuts will require Austin citizens and government officials to rethink what services and programs they are willing to pay for through tax support. By their very nature public safety, waste systems, and streets and roads are the most basic of services. After that, library, recreation, and nature center change priorities depending on whom you are talking to," Goodnature said.

Goodnature said he sees the likelihood of a permanent reduction in state aid and because of that, the decisions made to adjust will also be permanent.

"Prioritizing what we are willing to pay for needs to be first on the agenda. Citizen input is the most critical component in prioritizing because it is our citizens that will foot the bill," Goodnature said.

Both 1st Ward Council members Lynn Koch and Mickey Jorgenson agreed on prioritizing what is most and least important to the departments.

"It is important to make sure we are taking a pro-active approach … making sure not to make any rash decisions," Koch said.

No matter what the numbers are from the state, "it is not going to be painless," Jorgenson said.

The council will meet for a work session at 5:30 p.m. Monday at the city hall conference room.

Items on the agenda include, an update on the flower program for 2003, appointments to the HRA and Port Authority boards, an update on the process and schedule to deal with the impact of state budget outcomes on Austin and a discussion on the use of the Carver governance model.

Roxana Orellana can be reached at 434-2214 or by e-mail at :mailto:roxana.orellana@austindailyherald.com