St. Louis’ $1.32 billion budget is balanced for now, but uncertainty looms
The City of St. Louis heads into fiscal 2024 in decent shape financially – but budget policymakers acknowledge that a delicate balancing act may be required eventually.
Budget Director Paul Payne on Wednesday presented the $1.32 billion budget to the Board of Estimate and Apportionment. That’s a 7.1% increase over last year’s spending plan.
The city’s top fiscal policy board is composed of Mayor Tishaura Jones, Comptroller Darlene Green and Board of Aldermen President Megan Green.
Hotel and restaurant taxes have mostly rebounded to pre-pandemic levels, Payne said, and sales taxes performed better than expected because of inflation, leaving some accounts with projected balances at the end of the current fiscal year.
But the city does not expect to see much revenue growth over the course of the next budget year, which runs from July 1, 2023, to June 30, 2024. Cooling inflation means sales tax collections will eventually slow down – lower prices on goods translates to less revenue. And Payne said most economists expect an overall slowdown this summer.
“The budget is balanced, although we do anticipate a period of uncertainty looking forward,” he said.
Revenue from a 3% sales tax on recreational marijuana, which will be collected starting in October, could help plug any gaps in the budget that emerge, Payne said. Potential interest from any remaining American Rescue Plan Act dollars could help as well. The budget also does not take into account the $250 million from the settlement over the departure of the Rams.
Pay raises and the associated increase in pension costs mark the biggest growth in expenses. City workers got raises in last year's budget, and police officers negotiated at least an 8% raise into their new contract, which means an equivalent boost for firefighters.
The raises are deserved, Payne said, but “we can't afford to ignore the pension piece associated with that, because that's creeping up.”
The recent market downturns along with the salary boosts mean the city will have to contribute $11.4 million more to its four pension funds collectively than last year, he said.
The city is also dealing with rising insurance and refuse collection costs.
E&A will take public comment on the $1.32 billion budget on Friday, then vote Monday whether to send it to the Board of Aldermen. Members have until July 1 to make changes, though any spending increases in one area must be balanced out by cuts in another.