Niles asking for additional quarter percent income tax to help with deficits

By Ed Runyan

runyan@vindy.com

NILES

The city is counting on the $900,000-per-year increase in revenue that would result from the 0.25 percent income-tax increase on the ballot Nov. 3 to help recover from its budget deficits.

Without the additional revenue, “There will have to be cuts all across the board next year, and they’re not just going to be layoffs,” former Niles Auditor Charles Nader said in August. “You will have to cut the budget anywhere from 10 to 15 percent.”

Nader resigned in mid-September. He had not sought re-election, and his term would have expired at the end of the year.

Mayor Ralph Infante said he continues to work on ways to cut costs to end this year without a deficit, but city officials say layoffs are still a possibility.

“A lot of people are squirming right now about losing their jobs,” Robert Marino, council president, said several weeks ago at a meeting of the city’s deficit commission, which was established when the Ohio Auditor’s Office placed the city in fiscal emergency a year ago because of deficit spending, including a $2.7 million shortfall in the city’s water department fund.

Mayor Ralph Infante, who lost his re-election bid in the Democratic primary, said the reason the income-tax increase is needed is because the city went 27 years with its current 1.5 percent income tax, which he says is one of the lowest municipal rates in the state. Warren’s rate is 2 percent.

The 1.5-percent rate generates about $6 million per year, but the cost to operate the safety forces is closer to $7 million, he said. The city used other revenue to make up the difference in the past, but those revenues have dropped.

The city had a $9 million surplus around 2010, but the poor economy resulted in a loss of $1.5 million annually from interest, the state reduced its revenue-sharing to Niles by $360,000 annually, and inheritance taxes dropped by $150,000 per year.

The city also lost income-tax revenues through the loss of General Electric and Amweld plants, he said.

“We’ve streamlined for five years, used up our unencumbered money, so we have no choice but to go out and get a quarter-percent,” Infante said. Infante cut about 20 jobs from the payroll, he said. Among the jobs eliminated were ones in the health department when the city asked Trumbull County to serve as the city health department, plus single jobs in the tax department and the Niles Municipal Court.