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Published: Friday, 11/22/2013 - Updated: 8 months ago

Income tax collections for city rise, but by little

Official: General fund revenues to cover deficit

BY IGNAZIO MESSINA
BLADE STAFF WRITER
Clarence Coleman, interim finance director, said the income tax collections weren’t up enough. Clarence Coleman, interim finance director, said the income tax collections weren’t up enough.
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As usual since the city’s economic recovery began, Toledo’s monthly finance report was a mixture of good news and bad news.

Income tax collections for the city — the largest source of funding that pays for Toledo’s operations such as police and fire — were up slightly for the first 10 months of 2013 versus the same time last year.

At the same time, however, it was not up enough.

“The tax revenues are still going to be short for the year but the good part is that general fund revenues are enough to pick up the deficiency,” acting Finance Director Clarence Coleman said. “We budgeted $163.9 million, and we haven’t tallied our third-quarter collections, but we will fall short.”

The city collected nearly $114.63 million by Oct. 31, which is about 1 percent over last year.

“The $163.9 million was based on a 3.3 percent increase,” Mr. Coleman said. “There is just not enough time to make that up.”

Even with the tax collections expected to fall short this year, the proposed 2014 general fund budget predicts Toledo will collect $165.24 million from the 2.25 percent income tax.

Other 2013 revenues already were above budget by Oct. 31, including the estate tax, which the city expected would generate $650,000 in 2013 but produced a whopping $3.47 million. That windfall won’t happen again in 2014 because the estate tax has been eliminated.

Councilman George Sarantou, chairman of council’s finance committee, said he was encouraged by the October report but acknowledged the city is still financially fragile.

“When you look at our top 75 employees … we are getting a lot higher income tax revenue from all those employers which is a good indicator,” Mr. Sarantou said. “It also means companies are paying us more income tax based on the more people they have hired, and this also takes into place the 1,000-plus new Jeep workers on the payroll.”

Overall general fund spending was on budget as of Oct. 31, but police and fire overtime was way over budget, Mr. Sarantou said.

“Unfortunately, the numbers are indicating we are going to spend almost $500,000 more for police and fire overtime,” he said. “That is troubling because we have added more police and more fire personnel. … The administration told us that they have reduced police and fire spending in other areas to offset that, and they will be under budget totally for police and fire.”

City revenues across all funds in 2014 are predicted to total $657.8 million while spending will reach about $653.5 million. General fund revenues are budgeted at $244.78 million, and Mayor Mike Bell’s proposed spending will total $244.76 million — leaving the $20,000 surplus at the end of 2014 in that budget.

The administration again is recommending the city transfer $14.1 million from the capital improvements plan budget — the same amount taken out of that fund to balance the general fund in 2013.

Mr. Sarantou said council would start budget hearings with the Bell administration before the end of the year and that Mayor-elect D. Michael Collins would make adjustments to the budget after taking office on the evening of Jan. 2.

Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.



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