Article published March 24, 2009
Toledo's 2009 budget deficit could grow as high as $27M
By IGNAZIO MESSINA
BLADE STAFF WRITER
The increasing Toledo budget deficit for 2009 has swelled to about $22 million and could be as high as $27 million, the city's top financial steward said Monday.
"I think everything is on the table for cuts," City Finance Director John Sherburne said. "I suppose concessions is the biggest item there right now."
The deficit estimate is up from the $15 million figure Mayor Carty Finkbeiner announced this month and the $16.9 million that Clerk of Council Gerry Dendinger calculated on March 14.
Mr. Sherburne said plummeting income tax collections from rising unemployment have drastically reduced city revenues.
"It's all income-tax driven," he said. "We are now predicting $145 million in income tax collections, and the budget was passed at $169 million for income tax."
The last time Toledo collected $145 million from income taxes was 1997.Mr. Sherburne said the decrease in revenue will also mean less money for the city's capital improvement budget, which means fewer streets could be repaired and repaved this year.
Toledo Councilman George Sarantou, chairman of council's finance committee, said a $27 million shortfall of the city's general fund is a "worst case scenario."
Council meets at 10 a.m. today to review the latest figures.
Mr. Sarantou said Finkbeiner administration officials told him, Council President Mark Sobczak, and Councilman D. Michael Collins of the new estimate on Friday.
"We are going to have to have the bargaining units present so they will have accurate information as to where we are in terms of the budget," Mr. Collins said. "We are operating with 1997 dollars."
Councilman Betty Shultz, who is 79, said she could not recall the city ever being in such dire financial condition.
"I am really concerned because I am watching what's happening to other cities that are in this condition," Mrs. Shultz said. "What people have to realize is with the economy the way it is, we must cut more staff, reassign people, and raise revenue. We cannot continue to operate the way we are."
The mayor has offered several measures to slash 2009 spending or boost the city's revenue.
Mayor Finkbeiner said he would lay off 75 Toledo police officers to help close the deficit but that move would save the city just $3.5 million through the end of 2009. The savings take into account unemployment costs the city will have to pay after the May 1 layoffs.
The Finkbeiner administration is hoping for a federal bailout in the form of a $34 million "Cops Hiring Grant."
The mayor said that not only would prevent the layoffs but also would allow the city to hire 75 more police officers.
The mayor has placed some of the fault for the planned layoffs of police officers on council because it rejected his plan to generate $5.2 million through the end of 2009 by cutting 50 percent of the income tax credit for the 19,200 Toledo residents who are employed in other locales.
The mayor's proposal met with strong opposition from Toledoans who work elsewhere.
Mr. Finkbeiner said council needs to reconsider the tax credit plan and also wants the city's unions to accept deep cuts.
He also wants to save $1.4 million from new contracts with police officers and firefighters. The city's proposal calls for a mandatory five-day furlough, co-pays for health care, and a 1 1/2 percent reduction in the amount the city pays to the state pension fund for all employees. Those would mirror some concessions already accepted by the American Federation of State, County, and Municipal Employees Local 7, the largest city of Toledo union.
The mayor had planned to save the city $2.5 million from the general fund by cutting overtime through a reduction in firefighters, but that was foiled by Toledo Firefighters Local 92, which persuaded a Lucas County Common Pleas Court judge to grant a temporary restraining order to stop the staffing changes, and both sides subsequently agreed to arbitration.
The cost for fire department overtime is $10,000 a day.
On Friday, most of the city of Toledo's nonunion employees started 36-hour work weeks, which means a 10 percent pay cut for about 100 general fund employees. Mr. Finkbeiner said that change will save the city's general fund $500,000.
Contact Ignazio Messina at:
imessina@theblade.com
or 419-724-6171.
Permanent Link
|
|
 |
|
Search
advertisement
