GIRARD Proposed income-tax increase divides oversight committee

The city doesn't have enough voter trust to seek a five-year tax rise, a councilwoman says.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- Councilwoman Kathleen O'Connell Sauline is asking the city fiscal oversight commission to unanimously support a 0.5-percent, two-year income-tax increase, but she may not get her wish.
Sauline, D-2nd, chairwoman of city council's finance committee, made the proposal Tuesday to the financial planning and supervision commission.
The commission has been overseeing city finances since the city was placed under a state-imposed fiscal emergency last August.
If placed on the November general-election ballot, the measure would increase the city income-tax rate from 2 percent to 21/2 percent to help offset an anticipated deficit of $507,000 for 2003.
The additional 0.5 percent would generate an additional $700,000 in revenue annually.
Sauline called a decision to place the issue before voters "urgent" because the election board's deadline for submission is Aug. 22.
Mixed opinions
"I personally don't support an income-tax increase," said Atty. John Masternick, a commission member.
The disadvantage of such a move, Masternick asserted, is that marginal businesses will move out of the city and no new ones will move in.
He called attention to Youngstown, where businesses moved to Boardman when that city's income tax was increased from 2 percent to 21/4 percent.
Commission Chairman Joe Gray threw his support to a tax hike.
"I don't have a problem with a tax increase," Gray said, noting it's a compromise from the five-year increase suggested by the state auditor's office and will save city jobs.
Sauline said she thinks the city lacks enough trust from its voters to seek a five-year issue.
"It's a no-choice," commission member Robert Delisio said in support of the tax increase. "We can't continue to cut."
Mayor James J. Melfi, also a commission member, said he would support some tax increase but wasn't specific about the amount.
Selling assets
Melfi said he has received proposals from five real estate appraisers to determine the value of the city-owned Girard Lakes.
The city, Melfi said, should sell off its assets while in financial trouble. However, he noted the city isn't in a position to sell the lakes because its value and best use aren't known.
He pointed out that the city has paid $235,000 monthly on a $2.51 million loan to buy the lakes that will cost $4.5 million over 17 years.
Masternick said commission members agree the lakes are the city's biggest asset, but the city can't afford them.
Councilman Charles Doran, chairman of a city-council committee looking at city-owned property, said it would be "shortsighted" to sell the lakes.
In the short term, Doran explained, the city should look at developing natural-gas reserves on the property or sponsoring deer hunts to generate some income.
In the long term, Doran said, the city should look to sell water and annex surrounding property into the city.
One of the problems with the lakes is that the lower lake dam is in disrepair. Melfi said the city has notified the Army Corps of Engineers the city can't afford to spend any money on it.
yovich@vindy.com