Possible ways of closing the deficit include various combinations of several hundred job cuts, additional property taxes, selling off delinquent property taxes for $20 million, "monetization" of parking meter revenues for $10 million, and taking $20 million from the debt reserve fund.
Drawing on the city's $76 million reserve fund is not an option, the mayor's office said, because it is already below the recommended amount of $102 million needed to cover two months of operations.
The mayor's office released a "four-option budget contingency plan" with a statement cautioning that they are only planning scenarios and "It is in no way the mayor’s budget proposal or a final document."
The number of layoffs in the four scenarios ranges from 659 to 2110, or roughly 10 to 30 percent of the workforce. With public safety virtually off limits, cuts of this magnitude are unlikely.
The tax increase to cover the $55 million to MCS would be 18 cents, and it would be called a "restoration" of the amount the City Council cut three years ago. Some of the options propose a lower repayment or paying it off on in installments instead of in one year.
The budget deficit was not unexpected. Many states and cities are facing deficits. But it comes in the middle of the debate over MCS charter surrender, an issue so complicated that most politicians admit they expect it to be resolved somehow in court.
What effect it will have on the March 8th referendum remains to be seen, but both sides are certain to bring it up. At a town hall meeting Thursday night, Senate Democratic leader Jim Kyle said Memphians are overtaxed already and the Republican-supported bill on schools that passed this week will make things worse. Opponents of school system consolidation outside Memphis don't get a vote, but they will likely join their allies within the city in denouncing the city's fiscal responsibility.