You need to know what that hole is, even if you can’t solve it right now. ~Larry Kujovich, Executive Partners, Inc., addressing the DeKalb city council on strategic planning (2013).
Last week, DeKalb’s finance department shared an operating budget forecast through 2023 with the finance advisory committee. Having obtained a copy, I’ve created a graphic to show operating fund (General Fund) highlights.*
Besides showing total revenues and expenditures in the General Fund, I’ve also separated out the fastest-growing operating category, personnel, as well as two line items within that category — regular wages and fire/police pensions — that are most responsible for driving the increases in expenses.
A third personnel line item, health insurance, is expected to grow from $3.71 to $5.37 million during the same time period.
The forecast assumptions for wages, pensions, and health insurance are 3.5%, 9% (on average), and 6% per year, respectively. The three personnel line items account for $9.5 million of an additional $10 million in annual spending by 2023.
As you can see, revenues cannot keep up with the spending growth. As it is, the forecast assumes council will raise property taxes by $4 million over this period to help cover pensions.**
The good news is that our city council still has several months to craft a 2019 budget that starts to change this negative outlook.
*All numbers are projections, except 2017 are the actual numbers and for 2018 I used the estimates of actual spending (instead of budgeted amounts).
**On 7/3 I added the statement about property tax hikes. Without them, the hole would be even larger.