Officials fear budget will lead to more Peoria layoffs

Mar 10, 2010 — Journal Star

John Sharp and Karen McDonald

Mar. 10, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- PEORIA -- A state budget proposal to cut the share of income tax municipalities receive will be devastating, officials said, and could likely lead to more layoffs in the city.

Gov. Pat Quinn's proposed budget plan is heavy on borrowing and pushing off old debts. The state is expected to have a $13 billion deficit for the budget year starting July 1.

Peoria Mayor Jim Ardis said a proposal to cut the city's share of the income tax would be "devastating," leading to a $3 million hit to the city's budget and likely leading to more layoffs.

"I really think it's time state government does what local governments do, and that's balance their budgets on living within their means," Ardis said Tuesday night. "It's not easy decisions, but that is why they go to Springfield. If they have to cut their spending back to 2007 levels or earlier and lay people off, I'm sorry. But I guarantee you that a $3 million hit on top of everything else we face this year is guaranteed (city) layoffs."

Peoria County officials are expecting to receive roughly $1 million less from the state. Quinn's budget director said municipalities can expect to receive 7 percent of income tax revenue from the state instead of 10 percent.

The county's Chief Financial Officer Erik Bush said that proposal essentially steals from the county's revenue stream.

"The governor's proposal is consistent with the state's approach to financial management over the last decade. One: Don't pay your bills. Two: Continue to add programs and expenses and not fund them. Three: Continue a spending pattern that structurally accelerates insolvency. And four: Use the credit card for beer and groceries, and carry a balance year after year," Bush said.

The anticipated income tax revenue cuts will mean more as the county approaches next year's budget because it operates on a different fiscal calendar than the state. Ultimately, though, the cuts mean revenue lost with the state "stealing" to support its own bad habits, Bush said.

"Last year, the county did right taking and restructuring our expense base by 8 percent to meet our revenue stream," Bush said.

John Sharp can be reached at 686-3282 or jsharp@pjstar.com. Karen McDonald can be reached at 686-3285 or kmcdonald@pjstar.com.

Newstex ID: KRTB-0157-42767513