Youngstown expects increase in tax revenue

Photo

Youngstown finance director David Bozanich

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

City financial officials expect a modest 1.5 percent increase in income-tax revenue that will help keep Youngstown out of the red this year.

Finance Director David Bozanich and Deputy Director Kyle Miasek told The Vindicator on Tuesday that the proposed budget presented to city council is a tight one that includes an overall surplus of about $200,000, including about $50,000 in the general fund.

The projected income tax collection for 2011 is $41,750,000.

The city collected $41,125,000 in 2010 from a 2.75 percent income tax imposed on those who work and/or live in the city and a 2.75 percent profit tax paid by companies.

“Companies are starting to see profits that they didn’t see in 2008 and 2009,” Bozanich said.

The projected increase would stop a trend that has seen the city’s income-tax collection decline annually from $48.7 million in 2006 to $41.1 million last year.

Despite the large decline, the city has been able to finish each year without a debt.

The city expects income-tax revenue to rise this year with several hundred construction workers busy at the $650 million V&M Star expansion project site, Bozanich said.

The city is funding departments at 2010 levels, Bozanich said.

That means more than $10 million in requested increases from department heads was denied, he said.

The city’s overall budget is $154.8 million while departments requested $165.5 million.

Only a handful of city employees will receive raises this year, Miasek said.

Those making more money this year were hired in the past two years at annual salaries below the rate given to their predecessors, Bozanich said.

Even with the raises, the newer employees will either be at or still be below the salaries paid to those they replaced, he said.

The city’s health- insurance costs through Anthem Insurance includes no rate increase for the first time in recent memory.

The city’s annual health-insurance cost is about $5 million, with employees paying 10 percent of that amount.

No increase in insurance costs was a “combination of older employees exiting the system and the city moving the age of the work force lower,” Bozanich said.

About a dozen senior and top-paid workers left the city payroll last year with about 20 expected to leave this year, Miasek said.

The city has about 720 to 750 employees.

City council has to approve a 2011 budget by March 31.

Council’s finance committee will start budget hearings next Wednesday at noon, said Councilman Jamael Tito Brown, D-3rd, that committee’s chairman.

There also will be budget hearings March 10 with more on the following week, he said.

Brown asked the finance department to compile information that compares the proposed 2011 budget with what was spent last year. He said he expects to receive that information shortly.