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Officials focus on sales-tax failure
If the tax fails again in May, the consequences will be severe, officials say.
YOUNGSTOWN — The impact of the recession on Mahoning County’s finances has been devastating this year, and another failure of the sales tax next year would cripple the county’s operations, says the county administrator.
Other county officials also spoke Thursday of dire consequences if the tax fails again in May.
“The effects of the economy on the county’s general-fund revenues have been dramatic this year,” George J. Tablack, county administrator, told the county commissioners at their first meeting since Tuesday’s failure of the sales tax.
The tax is now a five-year measure, and commissioners tried unsuccessfully to make it a continuous tax Tuesday. The county’s other half-percent sales tax, which was a five-year measure, was made continuous by the voters in May 2007.
The county’s budget commission estimated the county’s two half-percent sales taxes together would generate $28 million this year, but less than $22 million was actually collected through October.
It’s reasonable to expect sales-tax revenue for the whole year will fall $2 million below the $28 million projection, Tablack added.
It’s also reasonable to expect that revenues from the state will fall $600,000 to $800,000 below what state officials projected last year, he added.
The county budget commission estimated the county would get $4 million in interest income this year. But, through October, only $1.8 million in interest income has materialized, he noted.
The county reasonably can expect to collect between $1.7 million and $1.9 million less in interest income than the budget commission’s estimate for the year, Tablack said.
Based on those numbers, Tablack said “it’s difficult to see” how the county can collect the budget commission’s estimated $59,443,000 in total general-fund revenue this year.
If it could be achieved, the $59,443,000 figure would be $8 million less than the general fund’s receipts last year, he continued.
If the sales tax that failed Tuesday isn’t renewed in May, collection of it would cease Sept. 30, 2010.
“Next year, if the sales tax were not to be renewed, we would see a total decline somewhere between $22 million and $24 million from 2008’s operations,” the county administrator said.
Budget hearings for various county departments for 2010 will begin next week, and it will be important to obtain more concessions from county departments next year, Tablack said.
Employees of several county departments that get money from the general fund took cost-saving concessions this year in the form of unpaid floating holidays. They included workers in the sheriff’s department, the clerk of courts office, facilities department and commissioners’ and treasurer’s offices.
“It failed, but it could have been a lot worse in this type of economy,” county Auditor Michael V. Sciortino said of the sales tax, which lost by 9,582 votes in a 57-43 percent split.
“I think we can make that up if we work harder” in the May campaign, he said of the deficiency in votes for the tax.
If this sales tax fails again in May, Sciortino said: “We are then put in a very desperate situation. It could be very drastic. I don’t see how the county government could possibly operate with a $24 million shortfall.”
Commissioner David N. Ludt said he believes the May sales-tax campaign should have a local spokesman in every county city, village and township.
Ludt said he thinks the sales tax failed Tuesday for a variety of reasons.
“I don’t think we got the message out that it was a renewal. Almost all the renewals passed. This didn’t, so I think that we need to work a little harder next time,” Ludt said.
If the tax fails again in May, “it will be devastating,” Ludt said. “We’re going to get it passed in May.”
After hearing from Thomas R. Trotter of Cleveland, the county’s bond counsel, the commissioners approved issuance of the following bonds and notes:
U$9,126,000 in bond-anticipation notes to renew for one year the county’s outstanding BANs that mature Nov. 24.
U$832,000 in bond-anticipation notes to pay for the sanitary engineer’s maintenance and storage buildings.
U$2,022,000 in bond-anticipation notes to re-line interceptor sewers.
U$3,060,000 to refund 2009 maturities of outstanding bonds for county jail improvements, extending their maturities until 2023.
U$925,000 in sales-tax bond-anticipation notes to refinance 2009 maturities of outstanding general obligation bonds for three years.
The commissioners also approved a contingency agreement with Environmental Protection Systems LLC of Girard for up to $25,000 worth of asbestos-abatement work, if needed, at Oakhill Renaissance Place.
Pete Triveri, facilities manager, said the commissioners put the money in place in case a leak in a pipe makes an immediate repair necessary.