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CARY, N.C – Triangle city managers said the economic recession left Raleigh with $5 million in revenue shortfalls and Durham with $5.5 million. But managers said they’re proceeding with cautious optimism.

“Unemployment rising slightly, new development not happening as fast a pace as it had been happening, but at the same time, if you look at all of what’s going on in Durham, there are still many great things happening,” Durham City Manager Tom Bonfield said.

Both cities are collecting more in property taxes, one of the major sources of revenue, this year than in 2008. Still, Raleigh City Manager Russell Allen said it’s about half of what they expected.

Sales tax, another main revenue source, has also been unpredictable for both municipalities. Bonfield said Durham has seen a 14 percent slide since last November while Allen said Raleigh is down between two and four percent.

"Whatever revenue shortfall we have, we will make up with cuts and expenditure,” Allen said. “We will end with a balanced budget. We will meet all our financial criteria for AAA credit. And the same thing will apply to next year."

In looking ahead to the 2009-2010 fiscal year, Allen expected the situation to worsen. He’s not calling for any property tax increases, but water and sewer rates in Raleigh could go up.

Meanwhile, Bonfield said the budget gap for Durham could reach $25 million to $30 million, which would be about 10 percent of the city’s budget. However, nothing is certain.

"While we're optimistic for where we are, no one really knows how long and how deep this economic downturn is going to happen," Bonfield said.