City budget hole grows a bit deeper

Don Spatz

Nov. 8, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Mayor Tom McMahon's administration dropped a budget bombshell Saturday: None of the concessions Reading was counting on from its unions was accepted, leaving the city with a $5.4 million gap to fi ll.

City Council and the administration, going line by line over a proposed 2010 budget calling for dozens of layoffs, had reworked dozens of items by Saturday morning to come up with $2 million to reduce those layoff s.

Now that $2 million not only won't eliminate layoff s, the city has to make up another $3.4 million somewhere else -- such as more police layoff s or higher taxes.

"It will have some major impact," said city Managing Director Ryan P. Hottenstein.

The unions' stance means the city can't eliminate the pay raises slated in next year's contracts for fi refi ghters and police and rank-and-file employees, and can't lay off fi refighters because a 1994 arbitration ruling requires the city to have at least 22 firefighters working each shift.

It also means the city can't move toward a so-called payroll lag that would have pushed $1 million in payroll costs from 2010 to 2011.

The city wanted to move to a two-week pay period, with the paychecks coming a week later, so the last paycheck would have been issued in 2011, but the unions rejected the idea.

Council members believe the city can raise income from housing permits next year. The administration's view on that and other ideas comes today from city Auditor David Cituk.

The proposed budget already calls for a half-mill hike in the property tax, to 12.01 mills, and a 0.5 percentage point hike in the earned-income tax, to 1.7 percent. Reading School District levies a 1.5 percent income tax.

Council still plans to vote on the budget at a special meeting Nov. 16, a week earlier than normal.

Contact Don Spatz: 610-371-5027 or dspatz@readingeagle.com.

Newstex ID: KRTB-0172-39536637