Leaders are blaming falling sales and property tax revenue for the shortage.
Durham officials say they are planning to eliminate 113 positions. Some of those are currently empty, but at least 35 people will lose their jobs.
Along with that, employees will not get pay-for-performance increases, but firefighters and police officers will get their raises.
The city will also contribute less to workers' 401K retirement plans and health care premiums will increase.
A public budget hearing to discuss the proposal is scheduled for June 1. City council members are set to vote on it June 15.