Youngstown could face a $2.5 million deficit next year, finance director says
The city’s operating budget for this year is balanced, but there could be a shortfall of up to $2.5 million next year, said Finance Director David Bozanich.
And that’s only if revenue from income taxes and business profit taxes reach their projections this year, he said.
The sobering news was delivered Monday during a two-hour city council meeting to discuss the budget.
The city is projecting $42,010,000 in collections from those two taxes this year – an increase from the $41,587,900 collected in 2016. Last year was the first time in three years those tax revenues went up.
The city receives a 2.75 percent income tax from those who work and/or live in Youngstown, and that same percentage from profits made by businesses in Youngstown.
Bozanich acknowledged the projected increase of $422,100 is “a little on the aggressive side,” but even if it isn’t “there could be difficulties in 2018” with the budget.
If that tax revenue growth doesn’t occur, there will likely be layoffs, he said.
If that growth does occur, the city needs to not replace workers when they quit or retire, he said.
“We think we can [avoid layoffs in 2017] as long as the income tax doesn’t fall through the floor and we’re not seeing that,” he said.
The city has about 30 to 40 more employees than it can afford, Bozanich said.
“I don’t want to sound alarm, but it’s a tight budget” for 2017, he said. “Our concern is 2018. We may have layoffs in 2018. We are comfortable we can make it through 2017.”
Read MORE in Tuesday's VINDICATOR.