The city of Charlotte projects its general fund budget to grow slowly over the next several years, and budget officials expect to have enough money to offer pay raises for the second consecutive year.
The early estimates for the fiscal 2014 operating budget could have a 3 percent raise pool for city employees, along with pay hikes for public safety employees.
A new pay plan for police and firefighters calls for a 1.5 percent pay increase, along with step increases of either 5 or 2.5 percent. Public safety employees who are early in their careers will generally receive step increases of 5 percent. As they progress in their career, the step increases are smaller, at 2.5 percent.
But if the City Council approves those pay increases, the early estimate is that the city will have a shortfall of $7.5 million.
Budget director Randy Harrington said Thursday that the projected deficit isnt insurmountable.
We will sharpen our pencils, he said during the City Councils budget retreat Thursday at Whitehead Manor in Charlotte.
State law requires the city to have a balanced budget.
Thursdays meeting was the citys first look at the budget. Council members will have several more budget meetings before approving a final budget in June.
The city projects its general fund revenues will be $560.5 million in fiscal year 2014. Thats up from $551.1 million for this year.
The general fund is mostly funded by property taxes, which are expected to generate $319 million next year. Sales taxes generate about $72 million.
The general fund mostly pays for police and fire, but also includes solid waste and transportation. Other city departments such as the airport and utilities are enterprise funds and have separate budgets.
The budget office projects the city will spend $568 million next year.
Those deficits are projected to grow to $14 million in fiscal year 2015 and $21 million in fiscal year 2016.
City staff said the sluggish economy will pose increasing operating strain on the budget given annual cost pressures from inflation, fuel, vehicle maintenance and annual cost escalations.
One concern is that the city could lose $17 million in revenue from the Business Privilege License tax. City officials are concerned that the General Assembly could revoke the tax, hurting the citys budget.
The early look at the fiscal year 2014 budget didnt include the City Councils biggest challenge approving a capital plan to build roads, sidewalks, affordable housing and other infrastructure.
Former City Manager Curt Walton proposed a year ago raising property taxes by 8 percent to pay for $926 million in new capital projects through 2020.
But council members and Mayor Anthony Foxx havent been able to find a capital plan they agree on. A major sticking point has been the plans inclusion of $119 million for a 2.5-mile streetcar line extension.
Six council members either oppose the streetcar or are wary about spending property tax dollars to build it. Foxx has become increasingly vocal in supporting the streetcar as a way to spark economic development along Beatties Ford Road and Central Avenue.