Joliet considering citywide salary cuts to ease budget strains

Joliet considering citywide salary cuts to ease budget strains

The city has suffered significant revenue losses as a result of COVID-19 restrictions. Pensions will further damage city services even as the pandemic fades.

Joliet leaders are considering a 4% salary cut for all 900 full-time city employees as a result of severe revenue losses from COVID-19 restrictions.

City Manager Steve Jones said the cuts would not be permanent, but could last through 2020. According to the Patch, Jones wanted to implement the changes by the beginning of June. The city clerk’s office told the Illinois Policy Institute the cuts have not yet been enacted and city leaders were in discussions with union leaders.

“We’re all in this, so let’s take the hit together, from me on down,” Jones said.

The city is facing revenue losses this year between $12 million and $20 million. The finance department estimates monthly revenue during the stay-at-home order may have been down 70% to 80%. With 78% of city expenses related to salary, Jones estimated a 4% salary reduction could save about $4 million.

Jones said salary cuts can still be avoided if Congress passes another stimulus package with relief for municipalities. Congress is not scheduled to debate a fourth COVID-19 relief package until late July.

Congress also remains divided about how much money should be appropriated. The House passed a $3 trillion package in May, but Senate Majority Leader Mitch McConnell wants to limit the next round to $1 trillion.

One of major sources of revenue for Joliet are their two casinos that bring in about $1.4 million in revenue each month, but have been closed since mid-March. While Illinois moves into the next phase of reopening June 26, there is still no timeline for when casinos may return.

Joliet began dipping into their cash reserve when the stay-at-home order went into effect in order to maintain critical spending and projects. However, the city’s $70 million reserve could run out by November without spending cuts.

“Quite frankly, we can’t wait until all the money is gone to do something,” Finance Director James Ghedotte told the city council.

The city’s capital projects may take a hit in order to save money. This puts in jeopardy projects such as the desperately needed replacement of a fire department roof.

The rising cost of pensions adds more stress to municipal budgets on top of revenue losses from the pandemic. Joliet pensions were projected to rise by $2.7 million in 2020, their biggest new cost.

Illinois spends more on state and local pensions as a percentage of all government spending than any other state ­– double the national average. Local governments are forced devote more money toward pensions, which leads to cuts in everything from emergency responders to filling potholes. They too often keep up with growing pension demands and prevent deeper cuts by increasing already nation-leading property taxes.

However, there is an alternative.

State lawmakers must pursue pension reform to ensure public employee pensions are secure and taxpayers are not left to pay ever more for ever fewer government services.

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