Decline in Northwood income-tax revenue steepens

4/13/2010

Northwood is a step closer to overcoming a 15 percent annual drop in income-tax revenues – but the decline now is approaching 20 percent, city officials said last week.

Mayor Mark Stoner said revenues through March 31 are down nearly 18 percent from a year ago, or $178,108 less for the three-month period. Income-tax revenues were down about 15 percent toward the end of February, causing the city to start a second round of layoffs since late last year.

“We're continuing to downslide right now,” said Councilman Michael Myers, chairman of the finance committee.

Last week, Northwood City Council gave the second reading of an ordinance that would reallocate income-tax revenue so 80 percent goes into the general fund, contributing an additional $240,000.

Council also gave first reading to an ordinance that would reduce salaries of Northwood's elected officials by 10 percent starting in 2012, so the mayor's annual salary would be $10,800 and each councilman's would be $6,300.

All already have been voluntarily donating 10 percent back to the financially troubled city this year, however.

Northwood lately laid off three employees, including two police officers, to save $387,835 this year. Four other employees were slated to be shifted from full-time to part-time jobs, saving an additional $68,507 this year, but those moves have not been made.

City Council last month approved reducing wages of hourly nonunion employees by 3 percent and having salaried employees take eight unpaid furlough days this year. Those reductions will save the city $24,000 this year.

Last year, as income-tax revenues started to plunge, Northwood laid off three full-time employees and one part-timer. The city left six other jobs vacant as it worked to balance the 2010 budget at $4.5 million.

Northwood resident Brian Dempsey said during last week's council meeting he was concerned that fewer police officers are on patrol and questioned why city officials are not doing anything but making cuts.

“You have no plan in place to try to increase revenue,” said Mr. Dempsey, a city fire department employee. “You're not doing anything to increase revenue. That's the problem right now.”

Mr. Myers said council's finance committee has discussed selling city-owned property and asking voters to raise Northwood's income tax by 0.25 percentage point for a total of 1.75 percent, but no decisions have been made.