City sees improvement, but faces near $3 million deficit
YOUNGSTOWN — The city received good financial news for a change: it exceeded its budgeted income tax collections for June by $46,200.
It’s the first month since January that collections were greater than expenses.
But as Kyle Miasek, interim finance director, describes it: “The details are important.”
That’s because most individual annual filings, which were pushed from an April 15 deadline to July 15 — just as they were for state and federal filings — came in by June 30.
Without that revenue, the city would have been $275,000 short of its projections for June, said Kyle Miasek, interim finance director.
That shortfall, however, is welcomed news, he said, because it shows a two-month pattern as the city took in $270,000 less than budgeted in May.
“We’re seeing more consistency,” Miasek said. “This is our situation at the moment. It can get worse or better, but I’ve got two months of consistency. That’s good and affirming.”
The city’s income tax revenue has been adversely impacted by the COVID-19 pandemic, Miasek said.
But it is showing signs of coming out of it, he said.
For example, the April collections were $333,000 under budget with March being the worst month, by far, with collections $904,500 under budget.
The June income tax collections were reported Friday. Those payments were made in early August with businesses having 30 days to give the taxes to the city.
The city’s income tax is currently $1,902,000, or 5.9 percent, under budget.
With the economy slowly recovering, Miasek anticipates income tax collections to be reported for the final four months of the year to be about $200,000 to $225,000 short for each month.
That means the city will see another $800,000 to $900,000 loss in income tax collections for the year and finish about $2.7 million to $2.8 million less than the $46,214,000 projected for the year, Miasek said.
While still an issue, Miasek pointed out it’s better than the projected shortfall of as much as $4 million from a few weeks ago.
The 2.75 percent income tax raised $46,664,000 last year and was budgeted to bring in $46,214,000 this year.
Through the end of June, the city has collected $30,103,000 — $1,902,000 under what is was budgeted for that time.
While the general fund is projected to end the year with a deficit, a few things will reduce the existing shortfall, he said.
The city received a $700,000 workers’ compensation premium refund this year with about $500,000 for workers paid through the general fund, Miasek said. The remaining amount is for those in enterprise funds — specifically water, sewer and environmental sanitation — that aren’t paid from the general fund, he said.
The general fund also saved about $200,000 to $300,000 as a result of employee furloughs, he said.
Also, city departments have curtailed spending with every department, except fire, below 50 percent of its annual budget through the first six months of the year, Miasek said.
The city is continuing to keep spending down — including cutting overtime unless authorized by Mayor Jamael Tito Brown, Miasek said.
“We’re saving money, and I have to quantify that amount,” he said.
The city recently received $1,945,000 in additional federal COVID-19 funds that must be used for virus-related expenses.
“We’ll look for reimbursements of money we’ve spent on COVID-related work,” Miasek said. “The health department is one example, though they don’t have $1.9 million in expenses.”
With the financial uncertainty brought on by the virus, the city also needs to look at its projected 2021 revenue and expenses, he said.
“We’re not out of the woods yet,” Miasek said.