Evanston City Council has known since July the upcoming budget season would be tough, but on Wednesday it got a number.
City staff presented its first bare-bones estimate of the deficit: $3,085,209. Aldermen must pass a balanced budget for next year by March 1.
This figure is smaller than last September’s $3.7 million deficit estimate, but does not include any cost-of-living pay raises for employees.
With an average raise of just 2 percent for union and non-union employees, the deficit would increase to $4 million. A 5 percent raise would expand the deficit to $5.6 million, according to city estimates.
Even if raises are kept low — which appears unlikely with every union’s contract up for renegotiation this year — several aldermen said a property tax increase alone could not erase the deficit. A 10 percent increase in the city’s portion of property taxes would bring in only $1.5 million — and likely would draw ire from city residents.
“If we come to any kind of consensus tonight, it’s that we have a problem,” said Ald. Steven Bernstein (4th).
Consensus emerged on little else during the three-hour meeting, during which city staff presented initial projections of what the 2003-04 budget will look like with no unavoidable spending increases.
City Manager Roger Crum said revenues are currently estimated to decrease by $1 million, to $71.3 million. But expenses are expected to increase by $2 million, to $74.4 million.
The council discussed the projections but offered Crum little direction on how to draft a balanced budget proposal, which he will complete by January.
Early on, Bernstein proposed an alternative to singling out any of the 125 city-funded programs — most of which have survived the council’s budget axe for more than 10 years.
“Do we want to talk about an across-the-board (funding) cut instead of eliminating any one thing?” he asked. “If we had predecessors who wanted to cut anything, it (already) would’ve been done.”
Ald. Arthur Newman (1st) said he disagreed with such an approach. He said it would harm some services, such as Evanston Police Department, that cannot absorb a funding decrease without consequences.
Instead he urged the other aldermen to give Crum at least some general instructions, such as looking at duplicated services or trying to divide the deficit burden equally between spending cuts and revenue increases.
William Stafford, director of finance, said the large deficit is a result of several factors: a $1 million reduction in state and natural gas tax revenue, an increase in operating costs and decreased building permit revenue as Northwestern’s building program winds down and new development in downtown lulls.
The ongoing state and national recessions also continue to impact city finances, though city sales tax revenue has been up this year, Stafford said.
Last year Evanston faced a $4 million deficit but was able to balance the budget through spending cuts and new revenue.
To raise money, the council increased parking fines and passed a 7 percent hike in the city’s portion of property taxes. To decrease spending, the council cut from several city programs and reduced non-union employee raises.
But the council rejected many cuts that Crum proposed as long-term solutions. Crum originally recommended cuts in programs such as the Summer Youth Employment Program and the elimination of Evanston Public Library’s north and south branches.
“Are we willing to talk about service cuts? Because last year we weren’t,” said Ald. Stephen Engelman (7th).
The council also discussed when to hold community meetings about the budget, with some favoring more council discussion first. Others, including Engelman, said community input now might help avert large protests when programs are put on the chopping block later.
“If we’re going to go out to the community, we have to go now,” Engelman said. “In January, they will be here.”
