Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget Local Revenue topic
No spam. Unsubscribe anytime.
Peoria staff warn revenue growth has slowed; $3.3 million in ongoing capacity over five years
Summary
City staff told the City Council Nov. 18 that local sales‑tax growth has cooled, urban revenue sharing fell about $10 million year‑over‑year and the city projects roughly $3.3 million in ongoing general‑fund capacity across five years while keeping substantial one‑time reserves.
Peoria — At a Nov. 18 study session, city finance staff told the City Council that the local economy is still growing but tax revenue growth has slowed, leaving modest ongoing budget capacity as officials prepare the FY‑27 budget.
Deputy City Manager Kevin Burke said the presentation was intended to set the table for the next budget cycle and warned that “this year has proven very hard to really evaluate our current economic condition, let alone see into the future.” CFO Sean Kindel and Deputy Finance Director Peter presented state and local revenue data that underlie the city’s forecast.
The presenters highlighted three main local revenue sources: local sales tax, state shared sales tax and state shared income (urban revenue sharing). Peter said the city saw a $10,000,000 decline in urban revenue sharing between FY24 and FY25 and that staff is using a conservative baseline of $40,000,000 for future forecasts. He also said the general fund has about $3,300,000 in ongoing capacity over the next five years and roughly $60,000,000 in one‑time fund balance.
Staff said recent sales‑tax gains were driven by residential construction and that retail and restaurant collections remain below historical averages. The finance team flagged risks including slower employment growth, residual inflationary pressure and uncertainty about how tariffs and interest‑rate movements will play out nationally.
Council members urged continued diversification of Peoria’s sales‑tax base and noted that the half‑cent sales tax used for economic development had been drawn down by investments tied to the Peoria Innovation Corps (PIC). Peter told the council the half‑cent fund had grown from roughly $15,000,000 to $70,000,000 over several years and that planned PIC expenditures would reduce the balance to a little under $10,000,000 by the end of FY26 if fully spent as budgeted.
Staff emphasized that utilities (water, wastewater, solid waste) are enterprise funds and are kept separate under fund accounting; the half‑cent sales‑tax expenditures do not affect those enterprise funds. The finance team also warned that Peoria’s water‑security goals will require additional infrastructure investment beyond the current CIP, likely prompting future rate‑setting discussions.
The city asked departments to submit budget requests in early January, with a recommended budget planned for council consideration in March and study sessions to follow.
The study session informed council deliberations but did not include a formal vote; the finance presentation will feed into the formal FY‑27 budget timeline.
