Mary Hansen
The State Journal-Register
Springfield’s financial worries are piling up as budget discussions approach for the fiscal year that begins March 1. Revenue from sales tax this year is about 2 percent less than anticipated, according to city budget director Bill McCarty. This is on top of a smaller-than-expected share of state income tax that was reported in August.
As a result, the city expects $3.6 million less than the $120 million budgeted to be flowing into its largest fund, which pays for police, fire and public works, among other services. The city’s utility fund is separate. Further, Springfield’s credit rating was downgraded in October, due in large part to its growing pension debt.
The possibility of a state worker strike, which could have economic implications citywide, is adding pressure. “Clearly we see a path of where our (sales tax) numbers could be worse than they were a week ago,” McCarty said, noting that the uncertainty causes some to hang on to their dollars and not spend as much.
The city has asked all department heads to cut their expenses by 2 percent over the next few months, with the goal of saving $1.5 million by the end of the fiscal year. The city might have to dip into its reserve funds to cover the rest of the gap between revenue and expenses.
“If you have it budgeted, it doesn’t mean you have to spend it,” Mayor Jim Langfelder said. “With projected revenue shortfalls, if it’s not a necessary item to purchase, let’s hold back and not make that purchase.” Departments could also hold off on hiring new employees as a way to delay costs, Langfelder said.
For the Springfield Fire Department, cuts could be difficult. About 95 percent of its $38 million budget goes to payroll, health insurance and other benefits, Chief Barry Helmerichs said.
The fire department is recruiting firefighters now, but they would not begin training and join the payroll until the fall of next year. Much of the remaining costs go toward maintaining the department’s 12 stations, which it will try to save on, he said.
The revenue shortfall has implications beyond the current year’s finances, McCarty said. “We have to lower our expectations of what we would like for revenue and that will affect the spend side of the equation,” McCarty said. Furthermore, he said, growing health care costs and pension debt could quickly outpace any projected revenue increases.
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Joe McMenamin for Ward 7 