The city of Toledo’s budget this year will be stressed even further with a carry-over deficit from 2010 totaling as much as $6 million.
City Finance Director Patrick McLean said Thursday the city will “fall a little short on the revenue side” of its ledger book and “a little long on the expenditures side.”
Mr. McLean said the deficit, which could range from $3 million to $6 million, would be addressed by taking more money out of the city’s capital improvements budget, which is used to pay for street repairs and other major projects. The city already has used $7 million from that account to try and balance the 2010 general fund budget, but now it will need to transfer even more money, he said.
“We can transfer as much as all of the money ... from the 0.75 percent income tax, which would be closer to $15 million, but we are not going to transfer that much,” he said.
The general fund is used to pay for police, fire, refuse, and other operations.
“We have already planned in our budget figures to move at least $7 million, so there is a gap even after moving $7 million,” Mr. McLean explained. “So it’s a question of how much more we might want to move.”
Although income taxes — which is by far the largest source of general fund revenue — collected in 2010 exceeded the budgeted amount, other revenues for the city fell short. The city so far has collected $143.22 million from the 2.25 percent income tax and from delinquent collections. That number is $1.89 million more than planned for 2010.
Mr. McLean also noted the city is still collecting 2010 income taxes.
Revenues from sources such as real estate taxes, estate taxes, joint economic development zone income, red-light cameras, court costs and fees, and monthly refuse fees were all down and below 2010 budgeted amounts. Red-light cameras, for example, generated $787,000 in 2010 — not the $2.1 million for which the city had hoped, Mr. McLean said.
The refuse fee collections were way down — almost $4.7 million below budget — because the cost to households was significantly reduced. Overall, city general fund revenues in 2010 were $221.22 million, which is $6.2 million less than what was expected when Toledo City Council passed the 2010 budget early last year.
The city in 2010 spent more than $223.5 million from the general fund — a slight increase over the $220.9 million budgeted amount for the year. Mr. McLean said, however, that total was still about $16.5 million less than what was spent in 2009, which indicates the city has kept its spending under control.
Personnel costs in 2010 exceed the budgeted amount in part because of overtime in the fire department, which was budgeted at $2.88 million, but spent at $3.13 million
Also Thursday, University of Toledo professors David Black and Oleg Smirnov reported to council’s finance committee that income tax revenues for 2011 would be about $143.39 million, slightly more conservative than the administration’s estimate of $145.5 million.
Mr. Black said their local analysis paralleled what national economists have found.
“The private sector seems to be emerging from recession,” he said. “On the downside, the political atmosphere at all levels of government, the mood is to reduce spending and that reduction in spending will have an impact on jobs.”
Reductions from public sectors will offset the gains in the private sector, Mr. Black said.
The pair said data show Toledo’s economy bottomed out in 2009 and is moving slowly upward.
Councilman George Sarantou, finance committee chairman, said council would consider the prediction from Mr. Black and Mr. Smirnov, as well as from the Bell administration, before it approves the final 2011 budget by the March 31 deadline.
“Their numbers are a bit more conservative than the city’s numbers on income taxes,” he said. “They are running about $2 million less, so I think that overall, their predictions are a bit on the conservative side, but they were last year too.”
Mr. Sarantou said the professors made a good point about public sector cutbacks.
“We know the public school systems in Toledo and the suburbs are cutting back and that will have a negative effect, but what they are also telling us is that manufacturing is picking up and that has a very profound impact,” he said. “How the Jeep plant does and how the Powertrain plant does has an enormous effect on the smaller companies involved in manufacturing, as well as parts supplies.”
Regarding the carry-over deficit, Mr. Sarantou said the city would continue to monitor costs in 2011.
“Considering where we were last year at $48 million deficit, this is very encouraging,” he said.
Of the $48 million that had to be slashed from the 2010 budget, $8 million was a carryover from 2009.