Mayor Paul Soglin on Monday asked city managers to draft budgets with 5 percent cuts to help close a potential $10 million budget gap next year.
But it's unclear if Soglin will propose a budget with sharp spending reductions when he offers a spending plan Oct. 2.
The city, with a $252.8 million budget this year, needs $18.7 million more next year to cover continuing costs, one-time commitments and rising debt costs, officials said.
The city can raise property taxes up to $8.7 million under the state's new levy cap, which would mean a maximum 3.47 percent boost in taxes on the average $232,024 home.
That would leave a $10 million budget gap, and to cover it, Soglin wants agencies — including the police and fire departments — to draft budgets with 5 percent cuts, which if applied across the board could save perhaps $10 million or more.
"I recognize this will require making some very difficult choices," Soglin said in a budget message to managers on Monday. He could not be reached for further comment Monday afternoon.
Such a cut would be significant, especially for big agencies. The Police Department, which has a $60.7 million budget this year, would lose $3 million. The Fire Department would lose $2.1 million and the Streets Division $1.2 million.
"You are looking at potential service cuts, potentially to core services," said Police Chief Noble Wray, adding that maintaining regular patrol could impact community policing, neighborhood officers and other proactive services.
"We'll do whatever we can to lessen the impact on citizens," Wray said.
Police face an extra challenge because 70 officers are eligible for retirement next year, which might mean moving up recruit classes, Wray said.
The Streets Division will consider options such as reducing snow plowing, graffiti removal and other services, Superintendent Chris Kelley said. "We have to buckle down and do as best as we can," he said.
In recent years, mayors have asked managers to offer spending plans with sizable cuts — Soglin asked for 5 percent reductions last year — but the city has largely been able to preserve services, avoid layoffs and restrain tax increases.
The city faced a $11.2 million gap last year, but lower than expected health insurance costs, a premium paid by lenders to increase the interest rate the city pays on borrowing, and other factors resulted in a budget that maintained services, added modest initiatives, and raised taxes by 3.7 percent on the average home.
The Finance Department will adjust some agency base budgets, and managers must submit proposals by Aug. 6.
Soglin has already asked managers to cut capital borrowing requests by 20 percent of what's in the city's Capital Improvement Plan for 2013. He will offer a capital budget on Sept. 4.
The council will make decisions on the operating and capital budgets the week of Nov. 13.