Toledo Mayor Withdraws Income Tax Increase Proposal, Offers Alternative Solutions to Balance Budget

Strategic Insights -

Toledo Mayor Mike Bell has abandoned his plan to raise the city's income tax from 2.25 percent to 2.5 percent, which would have generated an additional $7.5 million in revenue. Instead, he presented several other measures to address the city's $48.2 million deficit, including cutting costs, selling city properties, and implementing new revenue streams. While the proposed tax increase was met with opposition from city council members, Bell's alternative plan aims to reduce the deficit by $1.17 million in the 2010 general fund.

Key Takeaways:

  • Mayor Mike Bell withdrew his proposal to increase the city's income tax from 2.25 percent to 2.5 percent, which would have generated an additional $7.5 million in revenue.
  • The alternative plan aims to reduce the 2010 general fund deficit by $1.17 million, but still leaves a shortfall of $11.6 million.
  • Bell's plan includes eliminating 100 percent of the tax credit for Toledoans working in other locales, generating $8 million in new revenue, and delaying refuse-fee discounts for recycling to raise an additional $2.7 million.
  • Council did vote 12-0 to ask voters in May to give the city greater leeway over how a separate 0.75 percent income tax is spent, allowing for more money to be diverted from capital projects to operational costs.
  • The city plans to sell properties like The Docks or land in Monclova Township to help reduce the deficit and will continue to cut costs.
  • The city has a balanced 2010 budget due by March 31, and is considering an audit of its finances to help reduce the projected $48.2 million general fund deficit.
  • Council approved settlements totaling $450,000 with two former employees who claimed they were unfairly fired by former Mayor Carty Finkbeiner.

Statistics:

  • The proposed income tax increase would have generated an additional $7.5 million in revenue starting July 1 through the end of 2010.
  • The alternative plan aims to reduce the 2010 general fund deficit by $1.17 million.
  • The city still has a shortfall of $11.6 million in its general fund.
  • The proposed elimination of the tax credit for Toledoans working in other locales would generate $8 million in new revenue.
  • Delaying refuse-fee discounts for recycling would raise an additional $2.7 million in revenue.
  • The city plans to sell properties like The Docks or land in Monclova Township to generate revenue.
  • Council approved settlements totaling $450,000 with two former employees who claimed they were unfairly fired by former Mayor Carty Finkbeiner.

Sources:

  • The Blade, Toledo, Ohio (February 17, 2010)
  • Contact Ignazio Messina at: imessina@theblade.com, or 419-724-6171.
  • To see more of The Blade, or to subscribe to the newspaper, go to http://www.toledoblade.com.
  • Copyright (c) 2010, The Blade, Toledo, Ohio.
  • Distributed by McClatchy-Tribune Information Services.