Published: September 04, 2008 10:44 pm         

Bennett proposes salary increases of about 3 percent for many Terre Haute employees

TERRE HAUTE — The prospect of a smaller city budget over the next two years dominated discussions of pay raises for city employees at Thursday night’s Terre Haute City Council “sunshine” meeting.

Mayor Duke Bennett is proposing salary increases of around 3 percent for many city employees, but that could change based on projected tax revenue from the state.

“Right now we are proposing generally a 3 percent increase across the board” for many city employees, not including those under union contracts, Bennett told the nine-member council. “That’s what we believe we’ll be able to do,” he said.

Because of delays in collecting property taxes this year, cities across Indiana are trying to draw up 2009 budgets with uncertain revenue figures. Terre Haute officials anticipate next year’s budget to be around $2 million less than this year’s and the 2010 budget could be reduced by an additional $3 million.

“It’s pretty simple math,” said Councilman Norm Loudermilk, D-3rd. “If you don’t have the [money] you’re used to, then we either have to reduce services or find another source of revenue,” he said. “This is a topic that’s going to hit us … [we] might as well bring it out in the open now,” he said.

To prepare for the upcoming budget cuts, Bennett said he has been able to trim city spending this year by around 3 percent, leaving the city with about $1.5 million. That money will help “cushion the blow” caused by the expected 2009 cuts, he said.

However, Bennett noted, the 2010 budget will be more difficult.

“A year from now when we’re standing here talking this is going to be a much more difficult discussion,” Bennett told the councilmen. “It will be very intense.”

“Next year we’re going to be looking for 3 million more dollars [in savings]. That’s when we’re going to have a much more difficult time,” Bennett said.

Loudermilk, while saying he does not favor imposing new taxes, said the city must begin to deal with the expected revenue cuts soon.

“We can’t sit on the beach with our Coronas and watch Hurricane Katrina come in,” Loudermilk said. “We’re going to have to batten down the hatches now. If we’re going to have to do something, I’d sure like to be doing it.”

Bennett said he meets with the county commissioners, Vigo County School Corp. officials and other county officials to find ways to save money. The county as a whole is expected to lose about $10.1 million, Bennett said. “Everybody’s in the same boat so we’re going to have to get real creative,” he said.

Councilman Rich Dunkin, D-1st, suggested the city could use Economic Development Income Tax revenue to meet city budget shortfalls. Bennett said the EDIT tax raises around $4 million annually and he did not rule out using EDIT money to meet a possible city budget shortfall. “We’ll do what we have to do to have a balanced budget,” Bennett said.

“I’m glad to hear you say that,” Dunkin said, adding he believes that the city should continue funding the Terre Haute Economic Development Corp. to keep it “fully working for us,” but that additional EDIT money could be used to meet a budget shortfall.

The City Council will meet again in regular session at 7 p.m. next Thursday in City Hall. The council will not vote on elected officials’ salaries at the meeting; however, those salaries will be eligible for votes in October, said Michelle Furman, an official in the city clerk’s office.

Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.