The city of Fulton is bracing for a huge two-year boost in what it is forced to pay for employee retirements.
Mayor Ron Woodward said the city was notified recently that its contribution to retirements for most of its union employees will increase by $310,000 next year.Ã‚Â He estimates that when the retirements of all employees are added in, the final number will be around $365,000.
That’s a big jump in an $18 million budget.
The increase was not unexpected.Ã‚Â Local governments and school districts across the state have been warned by the state that contributions to the state retirement funds will be higher for at least the next two years.Ã‚Â Pension funds are invested.Ã‚Â For many years, local contributions were very small because the investments earned a high rate of return.Ã‚Â Now, with investments earning very littlr or losing money, local contributions have to fill the gap.
The state takes the gain or loss of a given year and spreads it out over the next three years, which smoothes out the huge ups and downs of investments while giving local governments some certainty in what they’re facing.
So Woodward knows that the city’s up against a $365,000 increase for the 2010 budget and another $300,000 increase in 2011.
“I’m going to try very hard to have no tax increase this year,” he said.Ã‚Â “Next year is another thing.”
He said the city is continuing to look for savings throughout the budget.Ã‚Â He mentioned the city’s street lighting accounts, saying they’re investigating whether lower-wattage bulbs could be used to save some money and whether some street lights are even needed.
Woodward is also not pleased that the state instituted an eight-fold increase in its utilities tax, from a quarter of one percent to two percent. He said that will drain another $6,000 from the city.
The city’s budget must be in place by the end of December. No formal budget proposal has been revealed yet.