Overland Park likely to lay off employees next year

Bleak revenue numbers are forcing Overland Park to make some painful cuts.

City Manager John Nachbar told the City Council on Monday night that city is looking at a $69.5 million revenue shortfall over the next six years if expenditures are not trimmed.

“We have to figure out how we’re going to deal with that,” Nachbar said before the meeting. “It’s a significant structural imbalance.”

No tax increases are being proposed to close the gap. Instead, Nachbar sketched out a variety of spending cuts that include a plan to lay off about 40 to 50 workers next year. That represents about a 5 percent work force reduction, but the losses total closer to 10 percent when earlier cuts are added in. Nachbar said 14 vacant positions were permanently eliminated this year, and other jobs also went unfilled in 2008. The city cut 20 positions in 2002 because of projected revenue declines.

A continuing decrease in retail sales tax income is the main culprit for the city’s budgetary pain. Collections of the tax, which make up a significant portion of total city revenues, are running 6 percent behind last year’s pace.

Nachbar said the city actually is anticipating a modest 1 percent growth in sales tax revenue next year. Collections from the tax have been falling for several years, and now stand at the same level as 2002 totals. That is not the entire problem, however. Property tax collections also are low because of declining appraised values.

This marks the second straight year the city has had to make significant long-term adjustments in spending plans because of ever-worsening revenue forecasts.

The city sliced $67 million from last year’s five-year spending plan. Just over half of that shortfall was eliminated through cuts in proposed capital improvements. Only $7.6 million could be found to cut in that area this time.

Nachbar has not determined exactly where the layoffs will come, but he said they will be felt throughout the organization. He wants to spare the police and fire departments as much as possible.

The city manager acknowledged that the recession has reduced the workload in some city departments such as planning and development.

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