Thursday, August 20, 2015
By Jordan Cohen
NILES
The permanent 0.25 percent income-tax increase and the $900,000 it would generate annually should voters approve it in November were supposed to be the linchpin for helping eliminate the deficit that has the city in fiscal emergency.
Instead, a surprised deficit commission learned Wednesday that not all of the revenue from the tax hike can be put toward reducing the general-fund deficit because of ballot language stipulating how the funds are allocated. Deficit elimination has been the city’s selling point for the increase.
The ballot language was prepared by Law Director Terrance Dull, who said he drafted the initiative after Mayor Ralph Infante told him how he wanted the revenue to be allocated.
Infante said the $900,000 would be divided among the general fund, police and fire equipment and street resurfacing. But Tim Lintner, a state auditor working with the city, indicated those plans would limit the amount of tax revenue for deficit elimination.
“The ballot language determines how the funds will be spent,” Lintner said.
Robert Marino, council president and commission member, said the auditors must not have realized how the tax was to be allocated.
“They looked surprised,” Marino said. “There was a disconnect between the financial representatives and the administration.”
Either a lesser amount of revenue from the increase or its defeat at the polls could jeopardize the viability of the city’s five-year recovery plan in which the tax increase is the most important component.
“I’m concerned about the financial plan [and if] it is the answer to the emergency,” said Quentin Potter, the recently appointed commission chairman.
Infante said that no committee has been established to push for passage of the tax increase. “We’re looking for help from the unions,” the mayor said.
The lack of data available to the auditors is not limited to tax revenue. One vital piece of information yet to be explained is the reason for skyrocketing spending. Lintner said that at the end of July, expenditures budgeted at more than $28,000 had escalated to more than $212,000. The auditor said he did not know why.
“What is causing this overspending?” said Potter. “We need to see more specific spending information than we’re seeing now.”
In addition, auditors say they do not have figures on savings from a negotiated health care agreement with the unions. Infante has estimated the savings to be in excess of $400,000 annually, but the auditors said they cannot yet confirm the actual amounts.
“We don’t have any accurate information [and] it’s a sad state of affairs,” Marino said. “I feel like a paper tiger up here.”
Commission members said they expect the auditors and the city to have all of the information when the panel next meets Sept. 16.