Auditors say entire Niles income tax good for deficit cut

By Jordan Cohen

news@vindy.com

NILES

City council can breathe the proverbial sigh of relief.

Council learned Wednesday from state auditors all revenue from the 0.25 percent income-tax increase on the November ballot can be allocated to reduce the general-fund deficit that has led to the city’s fiscal emergency status.

During last week’s deficit commission meeting, the auditors expressed concern about ballot language, which could limit the amount of the money that could be used for deficit reduction.

Had that been the case, the city would have had to revise its five-year recovery plan in which the tax increase is the most-important component.

“The auditors told us that [they found] no specificity in the language, so all the money can go to the general fund,” said council President Robert Marino, “We don’t need to change the five-year forecast.”

The auditors’ determination was about the only good news for council, however.

More bad news came from city Auditor Charles Nader, who said he has not changed his view that the city may have to make numerous cuts, including possible layoffs, by December. Nader, who is not running for re-election in November, said the situation will worsen if voters reject the tax hike.

“There will have to be cuts all across the board next year, and they’re not just going to be layoffs,” the auditor said. “You will have to cut the budget anywhere from 10 to15 percent.”

If voters approve the measure, the increase would generate $900,000 annually. No committee, however, has been formed to generate support for the hike, and Mayor Ralph Infante has said he hopes the city unions will help rally support.

State auditors have reported that city expenditures currently exceed revenues by $1.6 million. Councilman Giovanne Merlo, D-2nd, said warnings like that indicate to him that furloughs may be coming even sooner.

“I wouldn’t be surprised if they come before November,” said Merlo, who is running unopposed for auditor in November.

Meanwhile, one Niles business is not sitting still for another problem due to the city’s red ink: its inability to promptly pay municipal tax refunds.

Michael Janak, chief financial officer of Dinesol Plastics Inc., an injection molding and fabricating company, has sent a letter to the city demanding payment of its tax refund of more than $23,000.

Janak complained his company first learned about the delay through the news media.

“This is not acceptable,” Janak wrote. “Dinesol would have preferred to learn of the city’s intentions to delay payment directly … rather than a news article.”

Janak said the company is “open to any and all payment options.”

Treasurer Robert Swauger said he expects legislation to pay the refund to come before council at its regular meeting next week.