Dover Leaders Projecting $7M Deficit Over 5 Years - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Dover Leaders Projecting $7M Deficit Over 5 Years

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DOVER, Del. - Higher taxes and spending cuts could be coming for the city of Dover, as leaders try to find a way to deal with a projected multi-million dollar budget deficit.

Council members say they're concerned about a $7 million deficit, spread out over the next five years, that could impact the city as early as next year.

"This is not a doom and gloom day," said council member James Hutchison.

Hutchison is the chair of a newly formed committee established to help the city examine its finances.

"This is an opportunity and a challenge for us to come together and to put the team and facts before us and deal with the issues," said Hutchison.

City manager Scott Koenig says leaders may have to make some tough decisions.

"I think in the long run we have to look at if we have to do a tax increase or a fee increase, but at the same time we have to focus on controlling our expenses," said Koenig.

Koenig says revenues coming in to local governments have been reduced due to the economy. He says the $7 million deficit averages to about $1.5 million a year.

"Because our economy has been pretty sluggish, it really impacted our budget. That million-and-a-half dollar deficit that we're talking about... if our transfer taxes were rolling though as they had years ago, it wouldn't be that million and a half dollar deficit," said Koenig.  

Hutchison says in 2008, the economy was strong and the city was averaging more than $3 million in real estate transfer tax.

"All of a sudden that income dropped from $3.5 million to $1 million or less," said Hutchison.
        
Hutchison remains optimistic about Dover's future and says creating more jobs in the city will be an important component of that.

The first meeting of the newly established committee will be held from 4 p.m. to 6 p.m. Thursday at City Hall in Dover.

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