FOREST PARK — Despite a freeze in local government funds and a slight decrease in income-tax revenue, Forest Park should have no difficulty meeting expenses in 2002.

        But if current revenue trends hold true, this northern Hamilton County community will be facing a slight deficit by 2005, said Elaine Stookey, city finance director.

        In presenting the 2002 tax budget this week — the first step in preparing the final 2002 budget — Ms. Stookey said general-fund revenue is projected to drop about $300,000 from last year's $8.5 million. Projections then call for revenue to level out between $8 million and just under $8.2 million through 2005.

        “It doesn't look real good five years out,” Ms. Stookey said Monday, before council approved the tax budget. “We have time to adjust and rework as we go, putting in council's priorities.”

        To meet this year's budget, the city will dip into its reserves, with expenses expected to exceed revenue by $813,437 this year and $877,876 next year. That will continue over the next few years until the 2001 projected ending balance of almost $4.5 million turns into a $1.39 million balance in 2004 and a $25,620 deficit by the end of 2005.

        State funds have declined, from $285,390 in 1999 to $181,205 last year and $50,000 both this year and 2002. The gradual phase-out of the business inventory tax, being reduced by 1 percentage point each year, is cutting revenues from $148,054 in 1999 to a projected $75,000 in 2002.

        Revenue from the city's 1 percent income tax is expected to increase almost $123,000 from 2000 to this year before a projected drop of $75,000 to $5.8 million in 2002. Estate-tax revenue is projected to fall from $285,390 two years ago to just $50,000 both this year and next year.

        Councilman Michael Bonney, who heads council's Ways and Means Committee, said the upcoming budget would still allow for modest employee raises without a loss of services.

        ""It does provide for a level of services we're accustomed to,” Mr. Bonney said.

        A specific spending plan for the city will be put together over the next few months as City Manager Ray Hodges and council members review proposed budgets from the city's department heads.

        A final budget will be approved by early January.

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