Anchorage Mayor Dan Sullivan says the city is facing a $30 million budget gap.
Speaking to the Anchorage Chamber of Commerce Monday Sullivan says that is the amount needed if the city expects to have the same size of government next year.
The mayor says more than half of the $30 million is due to increased labor costs. The mayor says the city also expects to pay $4.5 million more this year into the police and fire pension fund.
Sullivan says there will be major expense cuts. He says it is hard to say at this point what could occur as far as city layoffs.
The administration is expected to present its 2013 financial plan to city assembly members by Oct. 1. The city operating budget for 2012 is $454.6 million.
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