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Two months ago, Salt Lake County was talking about higher pay for government workers to mark its slow, but continued, recovery from the Great Recession.
But that conversation now has turned to a multimillion-dollar shortfall that could mean higher taxes, slashed spending or a bit of both to balance the 2012 budget.
The size of the anticipated deficit: $17 million.
Two-term Mayor Peter Corroon confirmed Monday that he plans to meet with the County Council's Republican majority to talk about taxes — and about what it would take to keep the county government healthy without raising them. The Democrat doubts there is much left in the ledger to cut.
"We have pulled all the rabbits out of the hat," Corroon warned. "If we put our arm in that hat again, there will be a reduction in service."
The financial troubles represent an abrupt turnaround from earlier this summer, when the Mayor's Office recommended a 1 percent pay bump for the 3,500-plus county employees to restore wages, in part, to pre-recession levels. County leaders cut that pay by 2.75 percent at the height of the recession.
Even Corroon backed away from that recommendation when revenue projections — on cash streams ranging from property taxes to motor-vehicle fees — revealed the county was far behind where financial experts expected it to be.
Instead of a raise, a divided council gaveemployees a one-time bonus.
What makes the latest shortfallparticularly painful are the years that preceded it. When the economy tanked, the county trimmed tens of millions of dollars from its budget. Officials did boost property taxes, but they also downsized the workforce, pared employee pay and squeezed departmental budgets.
Consequently, Chief Financial Officer Darrin Casper said the county may have a hard time absorbing the funding gap.
"I'm fearful," he said, "that it may have an impact on service levels."
But a tax hike in 2012 could be a hard sell — especially in an election year for a number of county officeholders.
Council Republicans are against it.
"I would not be in favor of any tax increase, unless all other alternatives were scrutinized and looked at intensively," GOP Councilman Steve DeBry said. "It would be the very last resort. And even then, I'm not sure I'd be in favor of it."
Democrats are wary, too.
"We are just going to have to do things we haven't done before," Democratic Councilman Randy Horiuchi said. "We are down to the short strokes. We have some serious work to do."
Horiuchi characterized the nine-member council — including the four Democrats — as "not interested in raising taxes."
But Corroon, who is not seeking a third term next year, argued Monday that the council could face some difficult choices if a tax bump isn't on the table. The shortfall represents 6 percent of the funding for basic government services.
"At some point, you still have to provide the services the public expects," he said. "You still have to plow the streets, open rec centers and libraries and cut the grass in the parks."
The shortfall does not affect the county's municipal services fund, which pays for citylike services in unincorporated areas. That account, Corroon said, is healthy. It's the county's general fund that's hurting.
Council Chairman Max Burdick, a Republican, said the county's financial pickle is "much larger" than the latest budget troubles. He said it is time to talk about money — about a deferred maintenance tab now estimated at $80 million to $100 million, about voting machines that may need to be replaced at a cost of $10 million to $15 million and about a hodgepodge of other issues ranging from the installation of computer software to building construction.
"Before we entertain any kind of tax increase," he said, "let's put everything on the table and see what our needs are."
Democratic Councilwoman Jani Iwamoto wants one other thing on the table: An explanation about what happened and why. She urged the reinstatement of a joint budget committee — consisting of representatives from the council and the Mayor's Office — to examine financial solutions.
"This is kind of a shock to me," she said. "I would like to see what has really happened, why we are in this situation and where we go from here."
Could the budget blues brighten before December, when the council is expected to approve a 2012 spending plan?
Corroon hopes so.
"We are still in August," he said. "At this point, we are going to plan for the worst-case scenario, even though things might turn out for the better."
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Council to meet Tuesday
P The Salt Lake County Council is expected to touch on the budget during its 1:30 p.m. meeting Tuesday at the County Government Center, 2001 S. State St.