TAMPA -- Like the rest of the state and nation, Tampa faces hard times, Mayor Pam Iorio said today in her annual State of the City address.

"We are facing a severe budget challenge," she said. "There have been recessions before, but this is different." Its scale, scope and global effect make it difficult to resolve, she said. 

Iorio, who is in her final term as mayor and has indicated she may seek a U.S. Senate seat in 2010, told hundreds of city employees that President Barack Obama is doing what he can to turn the nation's economy around and that Florida lawmakers need to look at tax policy and over-reliance on development to feed the state coffers.

"Florida does not have a stable source of revenue," she said.

Locally, she said, the solution to economic woes is light rail because it will create jobs and promote smart growth. Iorio said she hoped by the end of the year Hillsborough County commissioners would approve putting a referendum on a sales tax to pay for a line from the University of South Florida to the airport on the 2010 ballot.

Still, Iorio said Tampa is a city that continues to thrive, with a dropping crime rate, new museums opening and installation of new water, wastewater and stormwater pipes. 

"We continue to invest, even in a time of a severe economic downturn," she said.

Janet Zink, Times staff writer