Youngstown finance director: Surplus could be near $1M
By Ashley Luthern
The city’s finance director told council Friday that the city could see a surplus as high as $1 million at the end of 2011.
“We had a small uptick in tax collections. ... I think we’re in pretty good shape. 2010 was a tough year, and we’re seeing a slight improvement that should carry into 2012,” said Director David Bozanich.
Council approved a measure Friday to reconcile the 2011 budget.
The surplus in the city’s general fund will be between $500,000 and $1 mil- lion, and as expected, Youngstown received about $41,850,000 in income tax in 2011, an increase from 2010 when the total was $41,125,000, Bozanich said.
The income tax makes up about 65 percent of the city’s revenue.
Councilwoman Annie Gillam, D-1st, asked Bozanich if the city should create a “rainy-day fund.”
Bozanich advised against it, saying that when the city did have a rainy-day fund, arbiters often used that as proof that the city had enough cash on hand for employee raises in contracts negotiated by the city and employee unions.
“It makes economic sense, but I recommend we keep it on the capital-improvement side,” he said. “... We should be able to fund [capital improvements] at a similar level as this year.”
Mayor Charles Sammarone, who already has said he wants to increase demolitions of vacant houses, told each council member to highlight a specific project in his or her ward during budget hearings early next year.
“We’re going to find a way to fund it,” Sammarone said.
Bozanich said his department is projecting a 1 percent to 1.5 percent increase in revenue in 2012.
Even with the general-fund surplus this year and projected increases for next year, Bozanich remained cautious.
One unknown is the possible closing of the Youngstown mail-processing and distribution center. Bozanich said the loss of jobs could equate to a $300,000 to $500,000 decrease in income tax for the city.
“We know it might rain, so we’re buying umbrellas,” Bozanich said.
Budget hearings with city council are expected to begin in January, and council must adopt an annual budget by March 31.