Warren's revenue less than expected

Withholding taxes make up a chunk of the city's collections.
By AMANDA C. DAVIS
VINDICATOR TRUMBULL STAFF
WARREN -- It's no mystery why income tax collections are down, despite the May passage of a 0.5 percent income tax increase.
That's what city Treasurer Patricia Leon-Games told city council's finance committee Tuesday, pointing a finger at the economy and job market.
Withholding taxes are down because many companies are laying off personnel, not filling positions and hiring employees at a lesser wage, Leon-Games said.
She added that about 75 percent of the city's collections are made up of withholding taxes.
Even though voters approved the increase, Mayor Hank Angelo has said, it's likely fewer police officers and firefighters will be hired than originally thought.
When compared with September of last year, income tax collections at the end of last month were $176,000 ahead, officials have said. But the city should be ahead by $500,000 to $600,000 because of the additional tax money the treasurer's office should be collecting, Angelo has said.
Similar experiences: Leon-Games said she checked with other local communities and found many are experiencing a similar drop in collections, including Youngstown, Lordstown, Girard and Newton Falls.
The biggest withholding losses can be seen when looking at accounts for area steel mills and top employers, including General Motors, General Electric and Delphi Packard, the city's largest withholder.
Officials have said the city will lose more than $150,000 a year in income taxes because CSC Ltd. in Champion closed.
Leon-Games did not give specific withholding figures for other area employers, citing confidentiality laws. This drew criticism from some council members, who called Leon-Games' report vague and said they can't get an accurate read on the situation without all the information.
The committee had asked for a year-by-year comparison of money collected from the city's top 25 withholders.
More expected: The treasurer said the city will realize a larger increase after Sept. 30, the end of the third quarter. Committee chairman Bob Marchese, D-at-large, said the group will meet again in a month or so to follow up on collections.
Because of the approval of additional tax money, Angelo has said, the city expected at least a 33 percent spike in collections when comparing August 2000 with August 2001. Instead, collections at the end of August were down $224,000 from the August before.
Officials have said the city wants to keep its promise to return police and fire staffing to 1999 levels but won't be able to do that if the city slips back into the red. The city laid off personnel and made other cuts in 2000 to head off budget woes. Employees were called back after voters approved the additional tax to boost police and fire staffs.