GIRARD Low receipts from income tax cause concern

Layoffs won't save the city any money for six months.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- If income tax receipts continue to dive, more cuts will be needed to balance this year's budget, city officials say.
"If the trend continues, drastic cuts will have to be made," Mayor James J. Melfi said Wednesday.
Income tax receipts in May were nearly $250,000 below what was anticipated, said Kathleen O'Connell Sauline, D-2nd, chairman of council's finance committee.
The city expected to collect $662,515 in income tax revenue but instead took in $416,393, or $246,119 below the estimate.
"We're going to live within our budget," Melfi vowed.
Although the mayor is guarded as to what actions he will recommend to city council, he does specifically mention reducing overtime and perhaps transferring money from other funds.
Melfi said the first need is to balance this year's budget, with an eye on reducing the city's nearly $1.9 million general fund deficit.
There has been some discussion of a levy to help pay for safety forces because the largest expenses in the general fund are police and fire services.
Not the solution
Sauline said laying off employees won't significantly offset the decrease in revenue because the city would have to pay unemployment compensation and benefits for furloughed workers.
Council is at a disadvantage, she added, because the mayor hasn't updated lawmakers on his five-year recovery plan.
It also underscores the importance of a finance committee meeting scheduled for 6 p.m. Monday before the regular council meeting at 7 p.m.
Melfi said this is the first time since the city was forced into state-imposed fiscal emergency in 2001 that added cuts will be needed. Employees were laid off two years ago.
The process of digging their way out of fiscal problems will take an additional three to four years, Melfi said, noting problems will occur during that period.
He pointed out the city decreased its deficit by $700,000 in 2002, but that was mostly because of $500,000 from unusually high estate-tax revenue.
yovich@vindy.com