Northwood officials mull income-tax hike
6/9/2010Northwood officials are continuing to debate how to address the city's ongoing budget woes.
Mayor Mark Stoner advocates shifting three employees from full-time to part-time, trimming about $75,000 annually on top of prior savings from layoffs and other cuts.
Northwood City Council is weighing ways to generate revenues, such as starting a $10 monthly garbage fee to raise $220,000 annually.
City Council also is considering asking voters in November to increase Northwood's income tax from 1.5 percent to 1.75 percent for three years. If that is not approved, then city council could lower the income tax credit for residents working outside the city from 1.5 percent to 1 percent.
Either would generate about $400,000 a year.
"I know there's not anyone here that wants to raise a fee or a tax," City Councilman Dave Gallaher said during a council meeting last week. "But the numbers, no matter how you run them, don't look good."
Northwood's economic picture brightened somewhat in May, when income tax collections for the month were up 25 percent compared to a year earlier. Through May, however, income tax collections this year still are down 9.7 percent compared to the first five months of 2009, although that is up from a 18.4 percent drop at the end of April, said Toby Schroyer, Northwood's finance and revenue director.
"Things got a lot better, but it's still very, very variable," Mr. Schroyer told council members at a finance committee meeting last week.
"It's a good sign. It's just something we're going to have to look at every single month."
One Northwood factory that supplies Chrysler Group LLC's Toledo Assembly complex added a second production shift in May, and two others likely will follow, Mayor Stoner said.
Still, Mr. Schroyer estimated income tax revenues likely will be down about 15 percent for this year, causing a drop of about $500,000 in Northwood's general fund.
City council last week delayed action on reducing hours for three Northwood employees to part-time in hopes that income-tax revenues will continue to rebound.
Some members voiced concerns about whether resident and commercial needs would be met by reducing hours for the three positions, including the coordinator for planning, zoning, and economic development.
Earlier this year, Northwood laid off three employees, including two police officers. Wages of hourly nonunion employees were reduced by 3 percent to help save money, and salaried employees are taking eight unpaid furlough days this year.
City Councilman Ed Schimmel suggested the city should consider increasing court fees.
"We definitely should look at court costs if we can get $20,000 extra there [and] save a position," Mr. Schimmel said.