Mayor’s proposed budget: no major cuts, no new tax increases – Dec 29, 2018

Crystal Thomas
The State Journal-Register

After years of revenue shortfalls leading to tax increases and cuts, Mayor Jim Langfelder says the city is on solid financial footing and he will propose a “status quo” budget, with money set aside for equipment upgrades and homelessness initiatives.

Aldermen need to approve the budget, with or without their changes, by the beginning of the city’s fiscal year, March 1. Over the next month, department heads will have public hearings in which they will give presentations to aldermen about their expenses.

At $125.8 million, Langfelder’s proposed budget this year is only $2 million more than last year’s proposal. That figure does not include the cost to run Springfield’s municipally owned utility, City Water, Light and Power.

This year’s budget debate will be markedly different than last year’s, when city budget director Bill McCarty had projected a budget deficit as high as $11 million in January. Aldermen ended up approving a budget with millions in cuts, as well as the mayor-proposed sales tax increase of a quarter percentage point and a 2-percentage point increase of the city’s telecommunication tax. The city’s revenues also were buoyed by the state pulling back on taking some of the city’s share of sales and income taxes, a one-time cash infusion from a settlement from Comcast, as well as earlier than expected revenue from annexation of lake properties.

Since tax revenues have come in better than expected because the city was able to control costs better, the city is projecting to have a $4.4 million operational surplus, and its rainy-day fund will grow to 17.3 percent of the operating expenses, which translates to $20.9 million, McCarty said. Some of that money will go toward retroactive pay, once outstanding fire and police union contracts are settled. Last year, the city council formalized a city-finance “best practice” into policy, in which the city’s fund balance must stay at minimum of 8 percent of operating expenses.

Langfelder said he hoped to discuss with the city council whether to make an additional payment to police and fire pensions above the minimum contributions required by state law. In previous years, the city has made $1 million additional payments.

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Aldermanic reaction

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Ward 7 Ald. Joe McMenamin said the city needed to properly fund police and fire pensions, saying pension debt continues to grow.

“The City needs to make pension contributions based on realistic actuarial assumptions,” McMenamin said. “It has failed to do so for over a quarter century. This is grossly irresponsible.”

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The State Journal-Register