YOUNGSTOWN Chamber opts to object to income tax proposal

Raising the income tax may drive people and businesses out of the city, the chamber says.
By PETER H. MILLIKEN
VINDICATOR STAFF WRITER
YOUNGSTOWN -- Based on information the Youngstown/Warren Regional Chamber currently has, its board of directors has declared opposition to the proposed 0.5 percent increase in the city income tax on the November ballot.
In its first official statement on the matter Friday, the chamber expressed its opposition to raising the tax from 2.25 percent to 2.75 percent, which would make it the highest municipal income tax in the state.
"Two-point-seven-five is extremely high, and it will have an economic impact that ripples across the Valley," Barbara Ewing, the chamber's vice president of public policy, said during a news conference. The tax is levied on both wages and business income, she noted.
"It doesn't just affect city businesses. Businesses that are actually located out of the city, but generate a portion of their revenue inside the city, are also required to pay those taxes, so it's a very broad issue," she explained.
"We believe that such a high tax rate would seriously damage the city's ability to attract new businesses and would have a negative effect on the city's overall economic position," the chamber said in a prepared statement.
Raising the tax may actually reduce the city's revenues by causing people and businesses to leave the city, the chamber said. It also said the increase may be especially harmful to the downtown area, which houses professional services that can easily move to the suburbs.
Audit recommendations
The chamber said it lacks information on how many recommendations the city has implemented from a state performance audit of city operations, which identified revenue that could be generated and costs that could be saved. The chamber offered to help the city act on the recommendations of the audit, which was released in 2000.
Earlier Friday, Mayor George McKelvey sent the chamber's board of directors a letter saying there is "more than enough time" before the election to complete the chamber's evaluation process concerning the proposed tax increase. Once the chamber submits information about its evaluation process, the mayor said he would schedule a meeting with city Finance Director David Bozanich at the chamber's earliest convenience.
"We have every confidence that the application of your endorsement evaluation criteria to the city of Youngstown's financial condition will justify [your] endorsement," of the tax increase, the mayor wrote.
The tone of the mayor's letter was more conciliatory than that of a Sept. 24 response to the chamber's request for city financial information, written on Bozanich's letterhead, in which the city bluntly asks the chamber for a complete explanation of its evaluation process and a report on the municipal finance background of each member of the chamber's evaluation committee.
Ewing said the chamber would reconsider its position if the city provides information that would not only allow the chamber to evaluate the need for the tax, but also show that financial controls have been put in place, savings have been made, and the city has done its best to generate additional revenue.