DECATUR — The Decatur City Council hopes it sent a message to state lawmakers Monday night, approving a 2018 budget that runs a $3.2 million deficit: Their actions in passing a state budget will have serious consequences locally.
The council voted 5-2 to approve the $67.9 million spending plan, with more discussions expected to occur in the coming months about ways to generate new revenue or make cuts to city services.
“I think it’s more about sending a strong message that we need to make some serious changes, and some of those changes are going to be hard,” Mayor Julie Moore Wolfe said after Monday’s meeting.
On top of a local continued decline in sales tax revenue and lagging economic activity, the city is one of many across the state that are in an uproar over parts of the state budget approved in July. Lawmakers OK'd a 10 percent reduction in local governments' share of the state income tax and allowed the state to collect a 2 percent fee to manage local sales taxes. For Decatur, that means a loss of $1.4 million from last year.
The Illinois Municipal League has been lobbying for at least some of the funds to return to local municipalities, and Moore Wolfe said a deficit budget would allow them to go to their lawmakers and show them the ramifications of the lost revenue.
“Every month we’re looking at what we cannot cover, and we’re going to be more present about going back to our lawmakers and going, ‘Look, this is hurting us. Here are what your citizens are saying because all of a sudden we’re going to have to cut this or that,’” Moore Wolfe said.
Other parts of the city's deficit include estimated back pay owed to Decatur police, who have worked without a union contract for more than a year as negotiations for a new contract have been ongoing, and a combination of declining revenue and increased costs for services.
The budget calls for a property tax levy of $13.87 million, which is nearly flat from the 2017 levy. The council is set to vote on the levy Dec. 18.
The vote comes days after Moody's Investors Services downgraded the city's credit rating from A1 to A2 with a "negative outlook" for improvement. Factors that went into the determination included the city's limited cash reserves, high debt, ongoing financial pressures and high pension costs, Moody's said Friday.
If the General Assembly reverses course in Springfield during the spring session, then the city’s budget forecast would be a bit better, City Manager Tim Gleason said. Instead of cutting services or raising fees or taxes at the start of next year, Gleason said the deficit budget allows the city to see whether state lawmakers will come through for the municipalities.
“We’ve taken a wait-and-see versus a knee-jerk reaction to something that may not occur,” he said, adding the other parts of the deficit could be covered through options such as tapping into the city’s cash reserves.
One benefit a deficit budget offers, as opposed to a balanced budget, Moore Wolfe said, is that it would allow services to make their case to the council about why they deserve city dollars.
“It says to these organizations, 'A) Show us why we should be supporting you, B) Look at some other funding opportunities because the city cannot continue the way that we’re going,’” she said
The council spent nearly an hour discussing the budget, with Councilman Bill Faber asking for a delay to the vote to find out what a balanced budget would entail.
“In other words, what sacrifices must be made to get to a balanced budget situation?” said Faber, who along with Councilman David Horn voted against the deficit budget. “I think our citizens would like to know the answers to that before we spend their money and commit to a deficit budget.”
But Moore Wolfe and other members of the council echoed the idea that the budget is not etched in stone, and that it is inevitable that further discussions will occur about finding new revenue and making significant cuts.
The council rejected a motion by Horn to table the vote, as well as three resolutions he brought up that he said would help get them closer to a balanced budget, like increasing fees on items such as video gaming terminals.
Tensions grew as the budget discussions pushed past the 40 minute mark, and at one point Councilwoman Dana Ray grew visibly frustrated with Faber after he claimed that there has not been enough discussion by the council about the budget or ways to find new revenues or make more cuts.
“We started talking about budgets in October,” she said. “If we started having budget discussions in October, then why wait until December to start bringing up some ideas. We had a study session ... Things can be brought at the study sessions, and honestly it comes across as grandstanding when you wait until the last minute to bring up issues.
“If we really, truly want to have a dialogue, then let’s have a dialogue and bring up information ahead of time, instead of waiting until we come to this meeting with the cameras on to bring up issues.”