From the City of Peoria’s “Issues Update”:
At the present time, with no changes, the City is projecting a potential budget deficit for 2010 of $10,046,499. This budget is based on re-forecasted revenues and expense increases based on historical patterns. Those increases include:
- 4.75% wage increases for represented employees;
- 3.5% wage increases for management-class employees;
- 1.5% increase in supply costs;
- 2.5% increase in contractual costs; and,
- 10% increase in the cost of healthcare.
The potential budget deficit represents a significant, yet fully-realized, challenge as the process for addressing the gap begins. While anticipated improvements in the economy may lessen the impact, the reality is that the City has an underlying structural issue of the rate of expense increases outpacing the rate revenue increases.
Given the size of the deficit, the City is not waiting until the Fall to begin its budget process. A team of senior staff leaders, including the Police, Fire and Public Works Departments, has continued the year-round work of identifying potential solutions. That team will be joined by three members of the City Council, to be appointed by the Mayor, who will collaborate with staff to craft a joint Council-Administration plan. Initial direction from the full Council will be solicited at the June 9, 2009 regular meeting, and opportunities for public participation and input are being organized. The City Manager is also meeting with representatives of the City’s employee unions next week.
The budget issues are serious. However, recent experiences in addressing 2009 budget issues prove that a well-designed process, open communication, creativity and teamwork will produce a similar positive result.
Here’s the detailed report from Finance Director Jim Scroggins:
Prelimnary 2010-2013 Budget
Mayor Ardis was quoted by the Journal Star as saying, “The first answer the council comes up with will not be to raise taxes. In light of what is going on at (District 150) and other taxing bodies coming out and raising taxes significantly, that’s not what we’re going to do. There will be some type of revenue enhancements and most likely service cuts while the economy stays like this. Everything will be on the table for discussion.”
Everything will be on the table? I doubt it. I’ll bet privatizing the city’s parking decks won’t be on the table. Nor will changing the redevelopment agreement with the museum group to put more of the Sears block back on the tax rolls. Nor will selling the Kellar Branch to Pioneer Railcorp, which would give the city three-quarters of a million dollars immediately. Nor is raising taxes to cover essential services being given serious consideration even though the mayor (and nearly every other city and county leader) supported raising taxes for the aforementioned non-essential museum.
I also find it interesting that the budget cuts this year are described in the Issues Update as a “positive result,” even though seal-coating of roads was cut by 50%, and code enforcement and police suffered cuts as well. The fire department is fearful that they’ll be the next department to be hit. While these departments are facing cuts, the Civic Center just completed a $55 million expansion, the city has committed to give $40 million to a private hotel developer, and the county has just committed $40 million to the proposed downtown museum.
Peoria has millions for bread and circuses, while basic services suffer.