More than 250 Peoria city employees receive over $150K in compensation

More than 250 Peoria city employees receive over $150K in compensation

Lucrative compensation for government workers stands in stark contrast to the city’s budgetary struggles and a flagging local economy.

As the city of Peoria struggles to fill a $7.9 million budget deficit driven by increasing costs and declining tax revenues, more than 250 city employees are enjoying annual compensation worth more than $150,000.

The issue was brought to light after the Peoria Journal Star published a letter to the editor highlighting the city’s expensive compensation packages and juxtaposing them with the city’s median household income and per capita income. The letter states that a 2015 city compensation report shows 246 Peoria employees had between $150,000 and $200,000 in total annual compensation, while 230 Peoria employees received total annual compensation between $100,000 and $150,000, and 139 had annual compensation between $75,000 and $100,000.

The majority of employees making $150,000 or more in compensation annually are police or fire department employees; as such, most are covered under collective bargaining agreements, according to the Journal Star.

Average Peorians are not as lucky as many of their city employees. The median household income in Peoria is only $45,552, according to estimates from the U.S. Census Bureau. And Peoria residents working in the private sector have experienced particularly hard times. In its January 2017 economic forecast, Moody’s Analytics listed the Peoria metro area as one of four Illinois metro areas in recession.

Peoria scored poorly on Moody’s business cycle tracker, which combines employment, factory output, homebuilding and house prices into a single indicator.

“Most of the employees on this list are covered by collective bargaining agreements. Of the 259 employees with a total compensation of $150,000 or more, all but 18 are in the police and fire department,” said City Manager Patrick Urich, according to the Journal Star. “Of this same number, all but 25 are in unions. With the cost of hiring a new employee, in some cases it may be more economical to pay overtime.”

Urich also pointed to skyrocketing pension costs as part of the problem.

“Health care and pension costs are very costly,” said Urich according to the Journal Star. “In fact, our pension costs for public safety amounts to nearly 45 percent of the salary of a police officer or firefighter.”

As is the case in communities across the state, pension costs are clearly crowding out funding for essential city services in Peoria.

The central Illinois city faces myriad problems. According to Urich, several of the city’s key sources of revenue, including gaming, utility taxes, sales taxes, property taxes and income taxes, have declined. And because of contracts with government worker unions, city officials find themselves struggling for solutions.

Peoria Mayor Jim Ardis ruled out filling the budget gap entirely by cutting funding for public safety; he even hinted at cutting city staff.

“We can’t cut our way to nearly $8 million without decimating public safety, and that won’t happen. But there is going to have to be a significant reduction in our workforce to once again bring our operations in line with revenue as we did a number of years ago,” stated Mayor Jim Ardis, according to the Journal Star.

Cutting down on the number of city employees will result in fewer personnel to provide public services and will force current employees to work overtime, resulting in overworked city employees and raising the specter of lower-quality services. While some observers have expressed frustration at many city employees’ high-end compensation, reducing compensation is not quite as simple as asking city employees to take a haircut.

At-Large City Councilman Zach Oyler put it in stark terms: “One of the problems we have is when we negotiate with various (public safety) bargaining units, we get taken to arbitration over salaries,” Oyler said in a statement reported by the Journal Star.

Peoria city officials are in a difficult position in the ongoing budget process. If they seek more revenue via tax hikes from already cash-strapped constituents, they’ll be making a bad situation even worse for residents living in an area deemed to be in recession. And if Peoria city officials simply slash public safety funding, they’ll be putting vulnerable residents at risk.

Peoria residents have every right to be irate. The need for structural reforms couldn’t be clearer. Illinois’ local leaders should be able to determine spending levels that align with community needs, not just with union demands.

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