St. Louis budget director presents $1.41 billion FY27 plan; general fund set at $637.1 million

Budget Director Paul Payne presented the St. Louis Board of Aldermen Budget and Public Employees Committee with the proposed FY27 annual operating plan on May 20, saying the whole plan totals $1.41 billion, a 0.5% increase from the prior fiscal year. He said the general fund is projected at $637.1 million, a 4.9% increase driven in part by a lower level of tax refunds in earnings and payroll categories compared with the prior year.

Payne told the committee the FY27 package assumes modest revenue growth — about 1.7% underlying growth — and that the general fund’s increase reflects both that growth and the stabilization of prior-year refunds. "The FY27 annual operating plan totals $1.41 billion," Payne said, adding that the general fund represents roughly 45% of the total budget.

Why it matters: the budget sets spending priorities for police, fire, public works, housing and other city services and frames the Board’s negotiations this month. Payne highlighted several major allocations: roughly $18 million across departments for compensation adjustments, a 7% pay increase for uniformed police and firefighters, a $3.8 million increase in projected health insurance costs (including $1.6 million for police retiree health), and a $6.5 million reduction in next-year pension contributions due to better-than-expected investment returns.

Key revenue and fund notes: Payne said earnings tax and payroll tax figures were distorted by pandemic‑era refunds but showed recovery in underlying growth. Sales and use taxes showed year‑to‑date increases (the 1-cent sales tax indicator up about 3.6%); restaurant receipts rose while hotel receipts declined. Grant funds are estimated at $31.9 million, down 18.3% from the prior year largely because ARPA interest earnings recognized last year are smaller this year.

Program and capital highlights: the director described $2 million in local use tax support for forestry weed and debris cleanup and another $2 million for the Code Blue emergency housing program; derelict-building demolition funding was increased by $4 million to $9.3 million; $1 million was added each for the right‑to‑counsel initiative and continued tiny‑homes support. A $5 million reappropriation of ARPA interest is proposed to complete the public‑safety answering point (PSAP) project near fire headquarters on Jefferson. Payne said capital improvement funds fall to $50.4 million, down about $11 million due to a smaller prior‑year operating surplus.

Personnel and pensions: the budget shows a net reduction of 22 general‑fund positions and an all‑funds net decline of 82 positions. Payne said total next‑year pension contributions remain above $100 million, with aggregate unfunded liabilities of about $534 million across four pension systems and police OPEB (other post‑employment benefits) of approximately $379.2 million.

What’s next: Payne concluded the presentation and the committee moved into public comment. Committee members said they will consider amendments next week and that the committee has issued subpoenas to the Board of Police Commissioners to appear before the committee as part of its review before amendments are finalized.

Ending: The FY27 proposal provides the Board a baseline for negotiation; the committee will take public testimony again and consider amendments before finalizing the Board’s position.