In a memo sent to council members Tuesday, Luken said the city faces an "enormous" financial crisis over the next two years.

Financial forecasts project the city will face an $11.5 million general fund deficit next year. The 2004 general fund budget is $329.6 million. The deficit could be as much as $71 million by the end of 2008.

Luken said income tax revenues have remained flat - a trend likely to continue given recent projections of poor job growth. He said the budget pressures the city faces are likely to continue for five years, maybe longer.

"I am sorry that not all the objectives ... will be achieved," Luken wrote. "I will try to accomplish as many of the goals as possible, but the money is just not there."

Luken said he would recommend cutting the budgets of the mayor, city manager, council and other departments. Cost-of -living and merit increases for top-level managers would also be eliminated.

Luken said he would preserve current service levels in the police, fire, parks and recreation departments.

Luken said the city would be "dramatically cutting back" on the funding that it gives to dozens of organizations.

He said the city's "lean" capital budget would focus on the basic.

"I don't think the city is going to be able to give away any money to organizations not directly related to the city," Luken said. "We have to take care of our own streets and our own buildings first."

E-mail kaldridge@enquirer.com