The city of Erie is facing a budget deficit of up to $12 million for 2027 unless major changes are made.
Public Financial Management, the city’s financial consultant, is working with Mayor Daria Devlin’s administration to find cost-cutting and expense-generating solutions.
Here is more about the situation.
Erie Mayor Daria Devlin.
When will decisions be made regarding the deficit?
Erie Mayor Daria Devlin said she has already met with city department heads and asked them to suggest cuts. Devlin and PFM consultants will need to have further discussions, as well as meet with Erie City Council, over the next several months regarding how to tackle the deficit.
However, nothing has been finalized. Devlin’s administration could also bring potential expense reductions or revenue-generating moves to City Council between now and the end of the year.
Would any personnel cuts/property tax increase have to be formally approved by Erie City Council?
Yes. City Council has the final say over the city’s budget. Devlin is expected to present her 2027 city budget in late October or early November. A property tax increase, for example, would be finalized via council’s budget process. City Council has until Dec. 31 under state law to finalize a budget for 2027.
Are any expense/revenue options officially on the table?
Other than Devlin requesting cuts from various city departments, city officials are still weighing and discussing options. PFM is set to explain the deficit to City Council at a May 14 study session at City Hall. However, PFM Director Gordon Mann has said that the city will likely have to consider personnel cuts and/or a property tax increase to close the budget gap.
Mann also stressed during a May 14 news conference that the city does have cash reserves, and is not at risk of running out of money.
“The key thing is that the city needs to start to take action now,” Mann said.
What are the next steps?
PFM is expected to make specific recommendations to Devlin’s administration regarding the city’s finances later this year. In its financial conditions assessment, PFM consultants wrote: “our next step is to meet with departments and conduct the management audit of City operations. The audit will review each of the City’s major departments and functions.
“During this step, we will develop initiatives that the City should implement to address financial and operational issues,” PFM consultants wrote.
PFM will produce a final financial management plan, later this year, that the city can formally adopt/implement. “The plan will include prioritization of initiatives based on urgency, feasibility, and this administration’s priority goals,” PFM wrote.
Devlin said she hopes to have that plan sometime in August, and it will help guide her administration’s fiscal decisions.
“This is not a one-step process,” Devlin said. “This is a series of decisions that we will need to make that will build on one another and we are prepared to do that methodically and responsibly.”
Contact Kevin Flowers at kflowers@timesnews.com. Follow him on X at@ETNflowers.
This article originally appeared on Erie Times-News: What’s next as Erie faces a $12M budget deficit without major changes