The city of Toledo expected to come up short on money collected from 2013 income taxes, but the shortfall was worse than expected.
City Finance Director George Sarantou said Monday the city collected $158.7 million from the 2.25-percent payroll tax. That leaves the Collins administration scrambling to make up a $1.3 million shortfall from last year at the same time it is trying to push Toledo City Council to vote today on its extremely austere 2014 budget.
“We feel pretty strongly that our medical and workers comp costs will come in under budget and that will make up that shortfall,” Mr. Sarantou said. “Our medical costs are pretty expensive so we think that will help offset, but we will not know that until April.”
The Bell administration wrote the city’s 2013 spending plan expecting to collect $163.9 million though Dec. 31, 2013 — which would have been a 3.3-percent increase over 2012. But former Deputy Mayor Steve Herwat announced late last year that the city would fall short.
The 2013 income tax expectation was downgraded to $160 million.
Even with the 2013 tax collections falling short, the proposed 2014 general fund budget — submitted in November by former Mayor Mike Bell and tweaked by Mayor D. Michael Collins — assumes Toledo will collect $165.24 million from the 2.25-percent income tax this year.
The income tax is the largest source of revenue for the city’s general fund. Police and fire operation eat up the majority of that budget.
City officials plan to stay with the 2014 assumption even with the shortfalls from 2013. Changing it would require cutting spending or inflating other expected revenues from sources like red light cameras and the Hollywood Casino in East Toledo.
The Collins budget predicts a $418,000 general fund surplus since total revenues are projected to reach $245.28 million while 2014 spending is set to be $244.86 million. The proposed 2014 spending is a slight increase over 2013.
Council President Paula Hicks-Hudson said she still expects council to vote on Mayor Collins’ proposed 2014 budget during a regular meeting at 4 p.m. today.
“We are going to have to really look at ways to spend more wisely and carefully,” Ms. Hicks-Hudson said.
Mr. Sarantou said the mayor’s 2014 budget required 2 percent spending cuts for all departments except police and fire, which were mandated to cut 0.5 percent each.
Councilman Larry Sykes said the city cannot continue to balance its general fund with money from the capital improvements fund.
“That has to stop,” Mr. Sykes said. “We have to stop that bleeding because we have done that over the years and the city’s infrastructure suffers.”
In November, 2013, the Bell administration recommended 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. Mayor Collins’ proposed budget also takes $14.1 million away from capital improvements for the general fund.