HAMMOND | To City Council President Dan Repay, the highlights of Mayor Thomas McDermott Jr.'s 2009 budget proposal are the seven jobs that have been eliminated and the nine jobs no longer being paid through property taxes.

But there's a downside that "absolutely" skews the bottom line, and that's the pay raises of 4 percent and more, Repay said.

"The pay raises are outweighing the reductions," he said.

McDermott has proposed a budget lean on cutbacks and heavy on pay raises at a time when -- according to Repay -- as much as $1.7 million may have to be trimmed. Currently, McDermott's proposed $112.7 million budget shows not only no reduction in the bottom line, but a slight hike from the current one.

The pay hikes are accompanied by increases in longevity pay, which is extra pay awarded to employees for their years of service. In some cases, longevity pay adds tens of thousands of dollars to each department's payroll, topping out at $451,523 for Police Department employees and $444,715 for Fire Department employees. Longevity pay for 2009 totals nearly $1.2 million.

"The ball's in our court, and we're at halftime," Repay said. "We've got about four weeks to get this all worked out and accomplished."

"It's going to come down to we're going to have to make the cuts and to decide to accept those raises or not," he said. "It's difficult to give out raises when we're talking about 16 people not having jobs and losing the Transit Department."

In recent weeks, Repay made the controversial move of suggesting eliminating the Transit Department at a savings of an estimated $1 million.

Though the Environmental Management Department currently has a healthy surplus, Repay questioned the long-term feasibility of removing the nine-member department from the city's payroll and supporting the department through the fines it collects.

Repay said the council also will explore the purpose of merging Animal Control and Emergency Services into the Police Department as suggested by the mayor. The "wholesale" move of the departments into the Police Department increases the department's budget by some $300,000, indicating no savings, he said.

A brighter spot is shoring up the city's self-insurance fund.

The city typically had been budgeting $6 million to cover insurance needs only to have the state find the city did not have the funds to cover that amount and order a cutback.

"That's where the shortfalls came in," Repay said. "Last year it was $6 million and we had the funds to support $6 million. I know of no further request for gaming revenue to shore up the insurance fund."

The public will get a chance to have its say about the 2009 budget when the council holds a public hearing on the issue during its regular meeting at 8 p.m. Monday. In addition, the council routinely holds a public caucus a half-hour before the regular meeting.