Amid meltdown, cities cut sports, cops, health
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Cuts across the board
In the Seattle area, King County is making cuts to offset a projected $93 million budget deficit. The cuts will mean fewer sheriff's deputies patrolling the county, staffing cutbacks at the courts and less spending on public health, including a program that helps women who are HIV-positive and pregnant find doctors and get counseling.
Even wealthy cities are feeling the pain. Aspen, Colo., will delay construction of a $360,000 foam pit for training snowboarders in the city gym.
"We have a lot of gold and silver medalists from the X-Games who live and train here, so that's going to have to go," said Aspen Mayor Mick Ireland.
Economists say that communities with close ties to the financial sector such as New York City and Charlotte will probably suffer the worst. Cities reliant on auto manufacturing like Detroit will have a tough time as well. Phoenix, Las Vegas, Miami and other areas that saw home values rocket will also struggle as the real estate market cools.
Philadelphia, on the other hand, is cushioned somewhat by its many hospitals and universities, which are resistant to swings in the economy, said Moody's Economy.com senior economist Ryan Sweet.
Communities near military installations and defense contractors also will do well, since federal contracts tend to run for a few years, said Steven Cochrane, managing director at Moody's Economy.com. Similarly, the Washington, D.C., suburbs in Virginia and Maryland may continue to prosper because of their many research and development firms and their large population of federal employees.
"This is where all the government bureaucrats live," University of Maryland economist Jeffrey Werling said. "They don't tend to get laid off. Those guys, they'll do fine."
Energy cities could suffer too
Up to now, communities from Texas to Colorado that are heavily tied to the energy sector have prospered from the run-up in oil and gas prices. But oil prices are plummeting, and those cities and towns could suffer too.
Phoenix didn't get hit by the mortgage crisis — it got slammed. For years, the city has been going through a building boom that turned desert into housing developments and strip malls. It is now looking at a glut of unsold homes.
Last fiscal year, Phoenix's tax revenue fell $89 million short. So the city doubled the cost of swimming lessons at city pools to $12 per session and eliminated 250 baseball games at one park. It left it up to homeowners to pay for the pruning of palm trees. And it ended a shuttle service that took the elderly and disabled to the grocery store.
City Manager Frank Fairbanks said Phoenix must slash up to $250 million more by March to make ends meet. This time, the cuts will sweep across the city's most essential areas, including police, fire, libraries and services for senior citizens.
"There's just no choice," Fairbanks said. "With all the cuts we've made in the past, I don't think there's anything left that someone in the community doesn't highly value."
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