Monday, August 8, 2011

City of Beloit Faces a Challenging Budget Process for 2012

Beloit facing tough year for budgeting. (Beloit Daily News, 8/5/2011)

Excerpt:   Simply stated, Beloit will have less money to work with in 2012. Numerous factors influence how much the city can spend. Among the most important are the ever-increasing costs of city employee healthcare and Beloit’s decreasing property values.

From 2010 to 2011, health insurance premiums were projected to increase by 8 percent, according to the 2011 adopted budget. York said the city spends about $8 million covering both employees and retirees. Beloit will be working with a new third party provider in 2012, he said.

Because of legislation signed by Gov. Scott Walker, certain public employees will now pay their own premiums, which will result in some savings for the city.

However, the impact will be minimal, as fire and police employees are exempt, Arft said. The salaries of these public safety providers make up two-thirds of the General Fund, he added.

Non-represented, civilian employees will begin paying premium costs at the end of August. Those in unions will not be affected until Jan. 1, 2012, Arft said.

“There is some positive impact, but it’s far from covering the rising costs,” he said.
Upward-trending health care costs, however, are not a phenomenon unique to governmental bodies, Coleman said. Prices are increasing everywhere for everyone. Compared to other expenses, government has less control over this type of spending, he said.

“The cost is influenced by national and international factors. There’s very little a city can do but react to it.”

As for housing and property values, Beloit is in a tougher situation than other cities. From 2010 to 2011, property values decreased by 7.6 percent — a figure Coleman said was above average.

With property values dropping, less money can be generated from property taxes — an important source of revenue for the city.

Other county and municipal budget news.
Fond du Lac city manager sez Governor's tools not enough to offset cuts.  (8/2/2011)
Manitowoc mayor asks department heads for 10% budget cuts.  (8/2/2011)

No comments: