PEORIA, Ill. (25 News) – Peoria’s proposed spending plan for the next two years went before the horseshoe for the first time a month ahead of the city’s self-imposed deadline for final approval.
Tuesday night was the initial reading and presentation of the more than $321 million spending plan for the city.
There will be a public hearing for the budget on Oct. 24. The city council will hold special meetings on Oct. 31 and Nov. 7 before adopting it on Nov. 14.
The budget is available for viewing at the Digital Budget Booklet website. This is the first year Peoria has used the site.
City leaders must complete a balancing act. They anticipate some sort of economic recession in 2024, but aren’t sure how bad it will be or how long it will last yet.
The Federal Reserve has taken measures over the past year to prevent a lengthy recession, but there may be some financial hardship.
“We are anticipating in this budget some level of financial pullback in the economy. That’s about a middle ground between nothing and what we saw in an ‘08 type recession,” the city’s Financial Director Kyle Crotty said in his presentation to the council.
City staffers believe local tax revenues will slightly decrease in most areas of income.
Hotel taxes, restaurant taxes, state sales tax, income tax, and more are expected to be lower than in 2023 by single-digit percentage points. Corporate income tax and real estate transfer taxes are expected to be at least 20% lower.
There are no planned property tax raises for this year, and the city does not plan to add on more debt. However, they do anticipate property tax revenue will increase due to the rising value of homes.
At the same time, the city is expected to increase capital spending by 34%. There are nearly 200 capital projects in the works right now, such as road improvements, and replacing streetlights and storm water drains. Overall, the city plans to spend around $101.4 million on those improvements.
However, many of those are funded by state or federal grants. The new Fire Station 16 planned off Northmoor Road will be built using $5 million in state funds. An initiative replacing streetlights uses $3.5 million in a state grant.
Various road repair projects, like reconstructing Wisconsin Avenue and fixing the Pioneer Parkway and University Street intersection also use state and federal grant money.
More details can be found in the Financial Director’s presentation to the council, linked here.
“All this money that we have now or have had because of federal and state post-pandemic grants and American Rescue Act, it will soon dry up,” 2nd District Councilman Chuck Grayeb said.
The city must allocate its federal American Rescue Plan Act dollars this year or return it to the government.
However, some council members were still concerned the city’s growth — or lack thereof — wouldn’t be able to keep up with these expenses.
“Our population is the same that it was 50 years ago,” At-Large Councilman John Kelly said. “We’re doing the same things that cities that are dying, especially older Northern cities, we’re doing the same things they’re doing.”
Kelly said he would like to see money put towards initiatives that will actually grow the city’s population. Councilman Denis Cyr also expressed concern about spending. Many of the council members asked clarifying questions on the 500-page budget document.
Another future concern for the city is pension funding. Peoria is obligated by law to put a certain amount of money into the public safety pension fund each year.
Crotty recommended the city use any unmarked funds for paying the pension obligation. According to a graph shared with the council, staff suggests paying at least $33 million into the fund in 2024, increasing that amount slightly every year until 2029.
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