Toledo’s 7-month revenue dips

Lower payroll tax collections cited; city says not to worry

8/23/2013

Toledo's income tax collections through the end of July were down slightly over the same period last year and total general fund revenues were below exceptions, but Bell administration officials Thursday told City Council's finance committee not to worry.

Acting City Finance Director Clarence Coleman said, as of July 31, the city collected $76.89 million from its 2.25 percent payroll tax. That is down 0.37 percent over the first seven months of last year. The dip was driven in part by a 9.73 percent decrease in individual payroll collections.

Mr. Coleman said the city would step up its garnishment program and increase the lawsuits it files in Toledo Municipal Court to force people to pay the income tax.

The payroll business collections category was down by 4.51 percent. The withholding category however, the largest, was up 1.41 percent.

Mr. Coleman said the national economy is expected to grow in the last quarter. Additionally, he said Toledo's unemployment rate fell slightly from 9.3 percent in June to 9.2 percent in July, which is the same as July, 2012.

Councilman Rob Ludeman asked why council shouldn't be more concerned about revenue shortfalls.

With 58 percent of the year complete, the city had collected or generated 45.7 percent of its expected $244.56 million for the year.

Mr. Coleman said much of the revenue is collected quarterly, such as money from the casino in East Toledo or cable company fees. At the same time last year, the city had only 47.1 percent of its total revenues, he said.

He acknowledged the city would likely fall short on the $4.2 million expected from speed and red light cameras. So far, the city had collected $1.71 million in fines.

Also Thursday, for the second month, there was apparent friction during the finance committee meeting between the Bell administration and Toledo Firefighters Local 92, the union representing rank-and-file firefighters.

Last month, Councilman and mayoral candidate D. Michael Collins criticized Deputy Mayor Steve Herwat for calling Toledo's $5 million surplus small. He distributed two letters to councilmen one of which was from Local 92 president Capt. Jeff Romstadt to Mayor Mike Bell. It demanded the city negotiate with Local 92, the bargaining unit for Toledo's firefighters, regarding the surplus. The letter said Local 92 voluntarily made economic concessions during 2012 negotiations.

The second letter, dated July 1, was a response from Mr. Herwat to Captain Romstadt that said bargaining pursuant to the clause was only for very specific situations, to which “the existence of a possible small budget surplus” did not apply.

Thursday, councilmen asked the union and the administration to resolve differences over a Bell administration request to hire Bowling Green State University for $25,000 to write a promotions exam for fire lieutenants and captains.

Council delayed a vote on the request on Tuesday to discuss the issue Thursday. The test was developed in previous years by a city employee who is now retired. Captain Romstadt said the city had not informed the union about the change.

City Human Resources Director Ellen Grachek said the administration's request to council does not violate the union's contract and that it was not seeking to change the contract. The two sides were asked by Councilman George Sarantou to meet and come to an agreement so council could vote on the $25,000 spending request next week during a special meeting.

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