SALT LAKE CITY -— The lingering effects of a global economic crisis have city leaders bracing for the worst as they prepare to balance next year's budget.

Slashing programs, laying off staff, a second straight year of pay cuts for city employees and tax hikes are all on the table as officials prepare for a projected budget gap that could reach $18.8 million for the 2010-11 fiscal year.

"It's the biggest hole we've ever had," said Councilman Van Turner. "It's going to take a lot of creativity. But every city in the country is dealing with this."

Officials said declining sales tax and building permit revenues over the last few years have led to the impending cuts to the city's $200 million general fund.

Budget experts expect sales tax to be down 19 percent, or about $9.2 million, from 2008-09. Building permits, meanwhile, have been cut in half since 2007-08, costing the city about $6.3 million.

The City Council will also have to find a way to plug a $5.6 million hole in this year's budget, thanks to a drop in sales tax, said Budget Director Gina Chamness.

"We obviously have a big challenge ahead of us over the next couple of months," she told the City Council on Tuesday. "We're not alone in this struggle. Although our challenge is significant, others are looking at a much more challenging environment."

Chamness pointed to larger cities, such as Los Angeles, where officials have cut more than 4,000 positions as they battle a $500 million budget gap.

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Colorado Springs, a city with a general fund of about $200 million, is facing a $27 million gap, Chamness said.

"They are literally letting the grass die in parks and have turned off street lights," she said. "They have removed trash cans from their parks and are asking residents to remove their own trash."

Mayor Ralph Becker expects to present the council with his budget plan in May.

e-mail: afalk@desnews.com

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