Galesburg is considering whether to implement new and increased fees to make up for a projected budget shortfall.
The city this week began the budget process for the next fiscal year, which begins January 1. The city faces a deficit of $588,740 in the general fund, and an overall budget shortfall of nearly $2.6 million.
The city is fighting a "structural imbalance," according to City Manager Todd Thompson.
“What we’ve seen in Galesburg is revenue sources are fairly stagnant, or in some cases, declining. And of course, we all know that costs continue to rise, especially personnel costs, which make up a large portion of the budget,” Thompson said.
Thompson added the city will either have to raise revenues or reduce services to make up for the shortfalls.
He said one expense the city is trying to control is the cost of pensions.
“Increases in the cost of police and fire pensions have certainly been one driver. We’ve seen those go up almost $2 million dollars in less than 10 years,” Thompson said.
“That takes away some of the property tax, which has traditionally gone into the general fund for general services.”
The city is proposing a property tax increase of around 4.5% to cover the increasing pension costs.
Thompson said a storm water utility fee is also being considered to fund maintenance and capital projects in the system, along with a half-a-percent gas tax increase to pay for road maintenance.