Revenue losses are reason for half percent income tax increase, Warren mayor says
By Ed Runyan
City officials have added up Warren’s losses in revenue: $400,000 less estate taxes in 2016 compared with 2011, $632,000 less in local government funds from the state and $186,000 less state government funds compared with 2011.
Warren’s 2016 budget is $25 million, but it expects to take in $23.5 million in 2017.
“Since 2008, expenses have been cut by $5.3 million, a 17.4 percent decrease,” a citizens committee headed by local businessman Paul Clouser said in a report to the city administration this summer.
The committee looked into the city’s finances and said the city’s anticipated revenue in 2017 without the tax, $23.5 million, is about the amount the city received in 2000.
“In this committee’s view, this amount is simply inadequate to provide for the health and safety of the citizens,” the committee wrote in the report. It endorsed the half-percent income tax Warren voters are being asked to approve Nov. 8.
The committee said the city is facing a deficit of $1.4 million to $1.8 million if the tax isn’t approved. The increase will raise $3.5 million to $4 million annually.
The city has specified the ways the increased revenue will be used over the five years of the tax – for police officers, firefighters and a road-maintenance program.
Eight to 12 police officers would be added if the tax is approved. That many officers would be laid off if the tax fails, Mayor Doug Franklin and Safety-Service Director Enzo Cantalamessa said during an interview with The Vindicator editorial board.
“We would probably have to close the street crimes unit,” Police Chief Eric Merkel told Warren City Council in August of one consequence of the tax failing. The street crimes unit has tried to combat drug crimes and put the worst criminals “on their heels,” Merkel said.
Drastic cuts would also occur in most other departments if the tax fails.
Warren currently has a 2 percent income tax rate; it would rise to 2.5 percent if the additional half percent is approved.
For a person earning $40,000 per year, the increase would be $200 annually – from $800 per year to $1,000.
The city has around 400 employees, which is 81 fewer than in 2008, the mayor’s office reports. It saved $450,000 annually by having the county 911 center take over Warren police dispatching in 2015.
The Warren City Schools has a 5.75-mill, 10-year renewal levy on the ballot. It will raise $1.9 million annually. It was first approved in 1986 and has been renewed four times.
John Fowley, co-chairman of the levy committee, said the five-year school district forecast indicates that if the renewal is not approved, the district will be in a deficit situation, “not immediately, but eventually.”