More budget cuts are on the way in Champaign

Thursday, September 02, 2010

After passing what it thought was a tough budget, city officials in Champaign are looking for more to cut.
Declining tax revenues and shortfalls in promised state appropriations are pushing local governments, including Champaign, into tough budget choices.

The city delivered more bad news this week, with finance director Richard Schnuer announcing the city is planning to cut $1 million from the budget that just took effect on July 1 and is drawing up contingencies for cuts of up to $6 million.

Frankly, given the glacial pace of the economic recovery, it's hard to imagine that the city's financial circumstances will improve anytime soon. They could even get worse, hence the city's planning for a worst-case scenario.

The problems are across the board. Consumers, concerned about keeping their jobs and paying their bills, are watching what they spend, and that has reduced sales tax revenues. After a burst of tax-subsidized housing purchases, the real estate market has slowed, and that affects property values. Unemployment continues to hover around 10 percent.

If good things are happening or are about to happen, it's certainly not apparent.

Since personnel consumes the lion's portion of the Champaign city budget, big budget reductions inevitably will have an impact on the work force.

That raises the question of why city employees, both union and non-union, would get even modest pay increases.

No one objects to city workers who perform difficult or important jobs receiving a good salary. But if the city doesn't have the money, how can it agree to wage increases?

State law requires cities agree to arbitration with police and firefighters if they cannot reach a contract. The result is that cities often agree to pay more than they would like to avoid taking the chance that an arbitrator would require them to pay even more. The ripple effect that has on other negotiations is obvious.

But employees, whether union or not, cannot escape the fallout of budget shortfalls. Whether the answer is not filling vacancies, furloughs or even layoffs, there's no escape when there's not enough money. Right now, there's not enough money coming in to maintain the city at the expected level.