City Manager Chris Brady said Thursday that in about a month the City Council will be forced to decide what essential services Mesa can afford in an economy whose daily headlines speak of home foreclosures, drastic slowdowns in construction and a calamitous drop in sales-tax collections.

Decisions will boil down to one question, Brady said. "What are the critical services we want to continue with?"

The Fire Department is already an early casualty.

Fire Chief Harry Beck sent an e-mail to his staff Wednesday outlining $1 million in budget cuts beginning Monday.

Mesa's budget problems are not unique to Valley cities. Phoenix and Scottsdale, among others, are struggling with unprecedented cutbacks. Phoenix's cuts could reach $250 million by June 30.

For most of its modern history Mesa has lived on sales taxes, an increasingly iffy source of money as other Southeast Valley cities have become retail centers in their own right. Now, a desperate national economic picture, which has seen home values and people's retirement savings plummet, has devastated the retail segment.

Figures released Thursday show Mesa's sales-tax collections for June, July and August dropped 13.6 percent from what was collected during those months in 2007.

Shopping Center Economic Model Is History

If you did not know it before, you do now: The Shopping Center Economic Model Is History .

Newcomers to the site as well as anyone needing a refresher course might also appreciate Does The Shopping Center Economic Model Work?

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

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