An anticipated hit to the city’s budget for a firefighters’ pension sweetener passed last year combined with general increases in health care and other benefits will account for more than half of an estimated $8 million increase in the overall budget.
But whether revenues also will have increased enough to cover that won’t be known for at least another month, city finance director Jim Scroggins said Monday.
“It’s going to be awfully tight,” said Scroggins, who only has sales tax revenue data through April. “I think we can make it, but I don’t know about 2007.”
Scroggins is estimating that total employee benefits will grow about $4.4 million over the 2005 budget. Of that, an estimated increase in the firefighter’s pension is more than $1 million – a result of a pension change the state passed last year that gives firefighters’ widows 100 percent of their pension. Police officers have had that benefit for awhile.
The exact impact of that pension change won’t be known until Sept. 1 or so.
“After this year, it will probably level off. You won’t see the big jump, but it won’t go down,” Scroggins said. “I don’t want to pinpoint just on the firefighter’s pension fund. We knew it was going to happen. (And) everything is going up across the board.”
For instance, city salaries are expected to increase 5.9 percent, or about $3 million more than last year.
“It’s all employees and a lot of it is locked to contracts,” Scroggins said of the increases.
Health-care costs will likely increase 12 percent, or about $1.7 million. Not for any specific reason, “it’s just the increasing cost of health care,” Scroggins said.
Workers’ compensation looks to be greatly increasing – about 77 percent, or $953,000, according to estimates released last week – when in reality it’s only increasing about $495,000.
“The big jump in workmen’s comp is because ’05 was underbudgeted. Probably the last two years have been,” Scroggins explained.
Still, Scroggins and City Manager Randy Oliver say it’s too soon to predict gloom-and-doom for this year’s budget. For one thing, income tax revenues are higher than expected because of the special census – something the state calculates on a per capita basis. The special recount this year found an additional 5,200 Peoria residents.
“I expect to submit to council a balanced budget like I did last year,” Oliver said Monday. “I don’t expect any cutting like was done two or three years ago. However, I don’t think there is going to be a lot of money left over.”
The City Council will get a preliminary 2006 budget on Oct. 7.