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Published: Friday, 7/31/2009

Toledo's income tax revenue down $8.4M

BY IGNAZIO MESSINA
BLADE STAFF WRITER

Toledo collected $8.4 million less in income taxes through June 30 than it did during the first six months of 2008 - which slightly widened the year-to-year gap, the Finkbeiner administration announced yesterday.

"Toledo's overall revenues are down 12.2 percent, which again is showing the trend on income tax collection is continuing," said Toledo Councilman George Sarantou, chairman of council's finance committee. "The good news is it has not gotten any worse, but the bad news is that it is not getting better."

The city collected $59.6 million by June 30 from Toledo's 2.25 percent payroll tax.

That figure is 41 percent of the predicted year-end total of $145 million.

As of June 30, 2008, the city had collected $68 million - or 44.1 percent of that year's total of $154 million. "This is an indication to us that the $145 million projection is on target as evidence through June 30," Mr. Sarantou said.

Tom Radwanski, the city commissioner of accounts, said the decrease in collections was expected because of an increase in Toledo's unemployment rate.

The jobless rate in Ohio rose to 11.1 percent in June from 10.8 percent in May and 6.4 percent in June, 2008.

Some of the highest rates are in northwest Ohio. In Lucas County, 14.6 percent of workers were jobless, up from 13.4 percent in May. The comparable U.S. rate was 9.5 percent.

Income tax collections are being watched very closely by the city's safety forces.

Under recently approved contracts with Toledo Firefighters Local 92 and the Toledo Police Patrolman's Association, members of both unions will get lump-sum payments in 2010 if city tax revenues for 2009 end up surpassing $148 million. The administration based its bargaining on projections of $145 million in income tax revenue in 2009, an estimate both the TPPA and Local 92 claimed was pessimistic.

The contracts require the city to pay them a 2 percent lump-sum bonus if the city's income tax receipts exceed $148 million; 4.5 percent if the collections exceed $150 million; 7 percent if taxes rise above $152.5 million, and 9 percent if collections exceed $155 million.

"We have a deep recession and unfortunately, because we are in the Midwest, we tend to recover the slowest," Mr. Sarantou said. "My own personal opinion is that we have bottomed out and that the numbers should begin to turn around a little bit, but it will be a slow recovery in Toledo."

The city's regular wages were down $2.9 million through May 31 because of layoffs and attrition, the Finkbeiner officials said yesterday,

Overtime for police and fire was up $624,000 through May 31 versus the same period last year.

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.



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