Lincoln City government is facing a potential $6.2 million deficit next fiscal year, based on financial estimates provided to the City Council this week.
The worksheet, prepared for Mayor Chris Beutler and his staff in late December, was based on maintaining the same property tax rate, receiving current state aid and paying salary increases already negotiated for two of the six city unions.
These preliminary estimates, made in December as part of the budget preparations, show a slightly deeper problem than the city faced in the past two years.
"It's pretty much consistent with the last two years, just a little bit worse," said Rick Hoppe, aide to Beutler.
However, this particular forecast did not take into account the likely loss of $1.8 million in state aid. Nor did it anticipate a likely $1.2 million increase in revenue from the telecommunications occupation tax, Hoppe said.
The forecast anticipates a similar level of city spending and includes money for employee step increases.
The budget gap is particularly wide because the city used $4 million in one-time funds to balance last year's budget and that money must be replaced, Hoppe said.
The city does have at least one discretionary fund, the $6 million fast-forward fund, which is intended to help with infrastructure development for companies that will bring high-paying jobs into Lincoln, Hoppe said.
City leaders use this forecast, based on what was known in December, as they begin planning for the next budget. The mayor generally makes final budget decisions in late May and unveils his proposal to the public in early July.
The five-year budget forecast, based on a slow 2 percent growth in revenue, shows a continually growing budget gap over the next five years, increasing to more than $19 million in fiscal year 2015-2016.