The tax credit will be discussed at a finance committee meeting on Wednesday.
By AMANDA GARRETT
VINDICATOR TRUMBULL STAFF
WARREN -- A proposed ordinance making its way through city council would give residents who have accepted a buyout from Delphi or any other company a tax break for starting a small business.
The legislation, sponsored by Robert L. Dean Jr., D-at-Large, was introduced at last Tuesday's council meeting and will be discussed at a finance committee meeting at 4 p.m. Wednesday.
Under Dean's proposal, Warren residents who use their buyout money to start a small business between June 1, 2006, and June 1, 2009, will receive a tax credit from the city. The amount of the tax credit will depend on how much of the buyout money each recipient puts into the business.
Last week Dean said he was proposing the legislation to help residents who are facing tough economic times and who want to stay in the area.
Dean's proposal also comes at a time when the city is facing declining revenue.
Auditor David Griffing has projected the city's total revenue will be 27 million in 2007. The city has averaged about 28 million per year in income since 2002. The city averaged around 15 million per year in income tax from 2002 to 2005. However, in 2006 the income tax dipped to 13.3 million. Griffing projected that income tax revenue in 2007 will be 14.25 million.
Delphi Packard Electric, General Motors Lordstown and Forum Health Trumbull Memorial Hospital have all announced buyouts or cutbacks in the past year, causing the projected decrease in revenue.
The city estimates it will see 800,000 to 1.3 million increases in income taxes from Delphi buyouts, paid to departing workers, either this year or in 2007, according to estimates from Warren Tax Administrator Thomas J. Gaffney.
The employees who accepted the buyouts, however, will pay no more income tax, causing the city to lose roughly 1 million in revenue next year, Griffing added.