Future of Niles bleaker without revenue boost from income-tax levy

When it rains, it pours. Just ask officials of the city of Niles who aren’t only dealing with an imploding operating budget but have to reassure a mistrusting public that they can be good stewards of taxpayer dollars.

Such reassurance is made all the more difficult with the ongoing criminal investigation of former Mayor Ralph Infante and other people in his administration.

Against that backdrop, voters in the March 15 primary are being asked to approve a 0.5-percent income-tax increase dedicated to the city’s police and fire departments.

Such dedication of the $2 million the increase would generate is an acknowledgment by Mayor Thomas Scarnecchia and members of city council that residents aren’t in a giving mood and, therefore, must be won over. Theirs is a way of doing so by appealing to residents’ desire to be safe in the community.

Last November, six months after a highly charged Democratic primary for mayor in which Scarnecchia defeated Infante, voters rejected a 0.25-percent income tax increase. The margin of defeat was 700 votes.

FAMILIAR ARGUMENTS

The arguments then for the additional revenue are the same as they are today: Niles has been in state-declared fiscal emergency since October 2014, and the effort to develop a five-year balanced budget that would pass muster with the Ohio Auditor’s office has been anything but easy.

Indeed, Mayor Scarnecchia’s refusal to adopt the plan put forth by his predecessor, Infante, has prompted stern warning from members of state Auditor David Yost’s staff and of the state Financial Planning and Supervision Commission. The commission has the statutory authority over the city of Niles’ budget.

Scarnecchia was able to persuade council to adopt his revised fiscal recovery plan that cut $1.5 million from the operating budget. The mayor also laid off 12 employees, but remains opposed to any move that would transfer the city’s 911 dispatching service to Trumbull County.

The state fiscal commission is to meet March 17 to review the recovery plan that is not dependent on the passage of the income-tax increase. However, commission members will know by then if Niles’ voters on March 15 were swayed by the arguments put forth by police and fire officials, in particular.

STRONG CASE FOR TAX INCREASE

While we continue to monitor closely the developments in the criminal investigation of the Infante administration, we do believe a strong case can be made for the 0.5-percent income tax increase.

Without the infusion of additional revenue, an already bleak fiscal picture will get bleaker. State officials have warned that even if voters approved the tax increase, the new money would not be seen until 2017.

Quentin Potter, chairman of the state financial commission, has been outspoken in his assessment of the city’s fiscal condition.

“It would be very difficult to balance the [2016] budget without significant spending reductions,” he said several months ago. “That may include some reduction in force.” He estimated the shortfall at $1.8 million.

As for the proposed tax increase, Potter was brutally honest: “ … you’re still not getting the revenue in 2016. You can’t count revenue that you don’t have coming in.”

But, city officials warn, with some justification, that the defeat of the tax increase later this month will be disastrous. Given that the police and fire departments now receive general fund money, and that more than 60 percent of the general fund goes for employee salaries and benefits, layoffs across the board will be inevitable.

The police department, for instance, has lost three officers through layoffs and two who are on sick leave. A force of 27 is not adequate given the demands of a city with a great deal of commercial development.

To be sure, Niles has had to come to terms with political upheaval and a city government that in the past has been dysfunctional. But, the budgetary challenges are real, and the need for additional revenue is clear.

We, therefore, endorse the 0.5-percent income tax increase and trust that city officials will keep their promise to manage the money responsibly.