First on WSFA 12 News: Montgomery cuts already struggling budget

MONTGOMERY, AL (WSFA) - The city of Montgomery is tightening its financial belt in response to toughening economic times. It's a belt that is running out of new notches to clamp down on.

Effective immediately, acting mayor Charles Jinright is ordering an across the board cut of two percent from all city departments. Jinright confirmed the budget cuts Monday afternoon, the result of serious revenue shortfalls. The two percent cut is equal to about $3 million.

The slowing economy and lack of consumer spending in January sent the city's budget into freefall. Sales tax revenue dropped about 11.4 percent over December numbers and nearly $830,000 over January 2008.

Montgomery is already struggling in 2009, dealing with a $4 million shortfall over the same time from last year.

What makes the situation even worse, Jinright says January is typically one of the best months for tax collections. But, while he's ordering every department to cut back, Jinright says he's fairly confident there won't be anymore budget slashing for the foreseeable future.

"I would rather be optimistic and say we don't have to cut anymore than we had to cut," he said, adding, "we'll wait and see. It's a day to day operation and a day to day process. We've got good staff in place to take care of this situation."

Jinright, who will step down as acting mayor and return to the city council after Tuesday's special election, said Montgomerians should understand they have good services and the city will try to continue them as long as is possible.

On the brighter side, Jinright does see gains in taxes from other areas. He cites Ad Valorem tax, rental tax and license fees as bright spots. He thinks increases from those sources could keep the city's budget on par and possibly even add to the empty city reserve fund.