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Youngstown’s tax revenue will be lower than budgeted, its finance director says
Councilwoman suggests city should immediately institute hiring freeze
YOUNGSTOWN
This year’s Youngstown tax revenue, already expected to be less compared with 2014, will be even worse, said city Finance Director David Bozanich.
And it’s definitely not going to improve next year, he said.
“It’s a tough economic environment,” Bozanich said. “We’ll be lowering the projections for 2015 and 2016. Next year is going to be very challenging.”
The city had budgeted $43,401,900 in income-tax and business-profit-tax collections last year, but finished with $42,878,600 – a $523,300 reduction.
Trying to be more conservative, the city budgeted $41 million for this year. That’s a 4.4 percent decrease from 2014.
Bozanich said the city wouldn’t reach that amount.
An evaluation as to how much will be lost this year should be finished in about a month, he said.
Bozanich made the statements Wednesday during a city council finance committee meeting when Councilwoman Janet Tarpley, D-6th, chairwoman of that committee, asked about the impact layoffs at Vallourec Star would have on the city’s budget.
“There are several relatively large businesses in the city that are closing, downsizing or not meeting financial expectations,” Bozanich said. “There are certain things that we thought would happen that have not happened.”
While he declined to mention specific businesses, Bozanich said to read the newspaper to see what’s happening with companies in Youngstown.
Vallourec announced layoffs Tuesday. While a number wasn’t mentioned by the company, city officials said they expect about 100 people to lose their jobs there. About 60 to 80 jobs were cut at Vallourec in August.
Also, the U.S. Postal Service plans to close the downtown mail-processing center next year, impacting about 80 jobs; the Corrections Corporation of America, a private prison, lost a federal contract last year resulting in the loss of 185 employees; and the Cafaro Co. is relocating in May to Niles, taking 200 jobs with them.
The city’s tax revenue comes from a 2.75 percent income tax on those who live and/or work in the city, and that same percentage on the profits made by businesses in the city. Next year’s tax revenue already was anticipated to be worse than this year, and Bozanich said it will be even lower.
When asked about layoffs of city employees, Bozanich said, “I’m not prepared to say that.”
The city has about 750 employees, about half as many as it had 20 years ago.
Tarpley said the city should institute a hiring freeze immediately, adding, “I believe we’re going to lay people off soon.”
Mayor John A. McNally said he doesn’t see that happening, however.
Also, McNally said he has scheduled town-hall meetings, at the request of council, for 5 to 6:30 p.m. next Wednesday and Nov. 4 at the Covelli Centre’s meeting room to answer questions about a plan to increase sanitation fees to fund demolition projects.
The administration also would reduce water rates for city residents to offset most of the sanitation increase.