Tempe is facing an estimated $5 million to $7 million budget deficit for the 2006-07 fiscal year because of a decrease in state funding based on stagnate growth in the city.
The deficit has forced the city to consider cutting services and look for options to raise additional funds.
The problem stems from Arizona's distribution of revenue to cities and towns based on their population growth.
"But Tempe's not growing, it's a land-locked city," said Cecilia Robles, deputy financial services manager for Tempe.
The deficit estimate was based on a report the city received from the Maricopa Association of Governments in November 2003, Robles said.
"That number can easily change depending on how big the pool is," she added.
The U.S. Census Bureau will conduct a special survey this fall to determine the allocation of state funding to cities and towns within Maricopa County, said Amber Wakeman, government relations director for Tempe. The survey will count the number of people living in Tempe based on representative samples.
Wakeman said students who are not permanent Tempe residents, including those living in residence halls, will be counted.
"That's part of the reason why we're doing it in the fall, to count the students who will be here," Wakeman said.
Tempe recently created a new committee to find ways to resolve the projected deficit, said Jerry Hart, Tempe financial services manager.
The committee will address the impact the deficit will have on the city.
"Tempe will take a hit," Hart said.
But Robles said the deficit probably wouldn't affect students on campus.
"Perhaps students living in rental housing may be affected if we have to cut back on police or fire services," Robles said.
City officials said no plans to decrease basic services have been discussed.
Robles said tax increases are not being considered at this point.
Councilwoman and committee member Pam Goronkin said she is very concerned about the projected deficit.
"We have to figure out how to generate something to bridge the gap," Goronkin said. "Or we have to make the more difficult decision of what services we will have to cut," she added.
Reach the reporter at emilia.arnold@asu.edu.
