City faces budget problems

City data shows that more than 70 percent of money spent goes toward workers. ERIE, Pa. (AP) -- Consultants studying Erie's finances have concluded the city -- which is facing a budget shortfall of more than $10 million -- must discuss cost-saving measures with its unions, according to the mayor's office. City figures show more than 70 cents of every dollar it spends goes toward employee expenses, such as salaries, pensions and health care. Erie expects to spend $42.2 million -- out of a total $58.6 million -- on its 850-person work force in 2006. City officials want to cut about $8 million from the 2006 budget. Revenue is projected at $50.6 million, excluding any new taxes or fees. Labor leaders said they would talk about concessions. "In past years, administrations have cried wolf. But we're well aware now that there's a real financial crisis," said Albert J. Rush, a local Teamsters official. "It would be premature right now to give any answers as to what [concessions] we might agree to. We don't know what the city needs from us." The Teamsters, the American Federation of State, County and Municipal Employees, the Fraternal Order of Police and the International Association of Fire Fighters represent city workers. Current benefits Mayor Rick Filippi often has said employees enjoy generous benefits, and the city cannot afford to continue paying for them. Most city workers, excluding AFSCME members, pay nothing toward their health insurance, which costs taxpayers $10,600 per worker per year. Also, the city pays health insurance for retired police officers and firefighters. "Government's pay and benefits structure has to come more in line with the rest of the country," said Andrea Hoffman, Erie's human resources director. Erie expects to pay 12 percent more for health care next year. Erie police union president James Schwartz said he's told union members that national trends indicate "the day will come when they will have to contribute [financially] to things they have not contributed to in the past." "For some guys, that's going to be hard to swallow," he said. Local AFSCME official Randy Procious noted his members are the only city workers to pay monthly contributions toward their health care. Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.