MONROE — As the tough economy is taking a toll on Monroe’s budget, city leaders are considering laying off employees and cutting expenses to deal with a $1 million budget deficit.
City officials wouldn’t say how many employees are expected to be let go, but acknowledge that layoffs seem inevitable. Some full-time positions also could be reduced to part-time to save money. A hiring freeze already is in place.
“It’s one of the hardest things I’ve ever done because you are affecting people’s lives,” Mayor Donnetta Walser said, adding that she doesn’t plan to reduce the number of police officers this year.
The city’s general fund revenue is expected to be $977,000 below this year, finance director Carol Grey said. That’s about 8 percent of the $12.2 million general fund, which pays for basic services including police.
The city’s total budget is about $65.1 million, and there are about 120 people on the payroll, Grey said. City officials are set to discuss options to deal with the budget deficit at a meeting on Tuesday.
City Councilman Tony Balk said that the council wants to eliminate the deficit without raising taxes because the city already is putting what could be a $7 million bond on the November ballot for road projects. The bond calls for a property tax hike.
“I think layoffs are definitely in the mix,” Balk said.
Multiple factors have caused the shortfall, City Councilman Mitch Ruth said. Rising gas prices have increased operation costs substantially. The cost of medical benefits for city staff has gone up as well.
“We need to be more efficient and cut expenses,” Ruth said.
This year, the city expects to receive about $3.9 million in sales taxes. That’s down from $4.4 million, an original estimate in the budget, Grey said. Sales tax is the city’s biggest revenue source with a 1 percent annual cap on property taxes, set by the state.
The revenue from building permits also is expected to be down by $150,000 this year, Grey said.
This is the most challenging financial period in years for the city of about 16,000 people, Walser said.
“This has been really tough,” Walser said. “We have cut back on expenses almost to the core.”
A Lowes store opened in late 2007 in a new shopping center along N. Kelsey Street, generating additional sales taxes for Monroe. That’s not enough to solve the city’s financial woes, city officials said.
More businesses are expected to open in the shopping center in the near future, Ruth said, but the city still is likely to face another tough year. Monroe needs to prepare a conservative budget for 2009 and avoid tapping reserve funds, he said.
“We can’t wait. It needs to be dealt with now,” Ruth said.
Reporter Yoshiaki Nohara: 425-339-3029 or ynohara@heraldnet.com.
Budget talk
The Monroe City Council is set to discuss how to cover a $1 million budget deficit at its meeting at 7 p.m. on Tuesday at City Hall, 806 W. Main St. in Monroe.
For more information, call the city at 360-794-7400.
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