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St. Louis, MO Budget relying on Gambling Revenue
E. St. Louis has $200,000 budget shortfall
By William Lamb
Of The Post-Dispatch
05/19/2002 05:59 AM
The executive director of the state panel that oversees East St. Louis' finances said Saturday that a "double whammy" of declining revenue and state budget cuts would contribute to a projected $200,000 budget shortfall this year.
But the worst is yet to come, said W. Kenneth Gearhart, of the state-appointed East St. Louis Financial Advisory Authority. A three-year financial plan for the city shows "significant deficits" in the near future, starting with $1 million next year and as much as $2 million by 2005.
That's bad news for city officials, who have made no secret of their desire to shake free of the oversight panel. The authority, which has the power to approve or reject budgets passed by the City Council, is to be dissolved once the city turns in balanced budgets 10 years in a row.
Speaking at the authority's monthly meeting Saturday morning, Gearhart said that income-tax revenue through April was down 9.2 percent from the same period last year. Revenue from a use tax, which is a sales tax on out-of-state purchases, was down 14.8 percent.
Revenue from the state's replacement tax, which comes from a surcharge on business income, was down about 16 percent through April, Gearhart said. Sales-tax revenue, he said, was down about 2 percent.
Compounding those declines is the state's projected $1.3 billion deficit. In an effort to close the gap, Illinois Senate leaders have proposed cutting the share of state tax revenue that Illinois sends to local governments by about $105 million.
City Manager Harvey E. Henderson said that he expected state budget cuts to hurt the city, but that his staff had not estimated their impact.
Gearhart did have some good news for the city. Gambling revenue through April was up 1.8 percent from the same period in 2001, he said. About half of East St. Louis' annual operating budget of about $20 million comes from the Casino Queen.
Gearhart said that the projected deficit for 2002 could shrink to as little as $100,000 if the city manages to rein in overtime pay. Last year, the city paid nearly $1 million in overtime, including about $600,000 to police officers.
"The overtime (pay) is clearly going to exceed the budget," Gearhart said. "How much it exceeds depends on whether they get the overtime under control."
Henderson said new time clocks that city employees began using on Wednesday would help keep overtime spending down. The clocks, which are linked to the city's computerized payroll system, are designed to alert city officials when overtime is going over budget, Henderson said.
By William Lamb
Of The Post-Dispatch
05/19/2002 05:59 AM
The executive director of the state panel that oversees East St. Louis' finances said Saturday that a "double whammy" of declining revenue and state budget cuts would contribute to a projected $200,000 budget shortfall this year.
But the worst is yet to come, said W. Kenneth Gearhart, of the state-appointed East St. Louis Financial Advisory Authority. A three-year financial plan for the city shows "significant deficits" in the near future, starting with $1 million next year and as much as $2 million by 2005.
That's bad news for city officials, who have made no secret of their desire to shake free of the oversight panel. The authority, which has the power to approve or reject budgets passed by the City Council, is to be dissolved once the city turns in balanced budgets 10 years in a row.
Speaking at the authority's monthly meeting Saturday morning, Gearhart said that income-tax revenue through April was down 9.2 percent from the same period last year. Revenue from a use tax, which is a sales tax on out-of-state purchases, was down 14.8 percent.
Revenue from the state's replacement tax, which comes from a surcharge on business income, was down about 16 percent through April, Gearhart said. Sales-tax revenue, he said, was down about 2 percent.
Compounding those declines is the state's projected $1.3 billion deficit. In an effort to close the gap, Illinois Senate leaders have proposed cutting the share of state tax revenue that Illinois sends to local governments by about $105 million.
City Manager Harvey E. Henderson said that he expected state budget cuts to hurt the city, but that his staff had not estimated their impact.
Gearhart did have some good news for the city. Gambling revenue through April was up 1.8 percent from the same period in 2001, he said. About half of East St. Louis' annual operating budget of about $20 million comes from the Casino Queen.
Gearhart said that the projected deficit for 2002 could shrink to as little as $100,000 if the city manages to rein in overtime pay. Last year, the city paid nearly $1 million in overtime, including about $600,000 to police officers.
"The overtime (pay) is clearly going to exceed the budget," Gearhart said. "How much it exceeds depends on whether they get the overtime under control."
Henderson said new time clocks that city employees began using on Wednesday would help keep overtime spending down. The clocks, which are linked to the city's computerized payroll system, are designed to alert city officials when overtime is going over budget, Henderson said.