Mayor William J. Healy II plans to put the money aside to meet future obligations.
The city may have closed a $1.4 million general fund budget deficit projected for 2014, but Mayor William J. Healy II said several variables could change that.
The auditor will certify another $1.286 million of additional revenue, nearly half of which ($600,000) comes from the final disbursement of inheritance tax revenue. The other money comes from income taxes ($286,000), casino revenue ($200,000) and miscellaneous revenue streams ($200,000).
Healy said the money will be put in the city’s reserves.
“This is just the amount we needed,” he said. “My intent is to take that recertification, put it into our carryover fund and then we’ll know that it’s likely we have our 2014 budget pretty much in place.”
Healy said he’s hoping to hire a dozen police officers and a dozen firefighters next year. Passage in November of a 4-mill parks levy, expected to generate $2.9 million, would provide additional relief. The levy will give the parks an independent funding source, freeing up about $1.2 million in the general fund to be used elsewhere.
A preliminary budget projection for 2014 by Healy and Finance Director Joseph DiRuzza is based on no revenue increases.
“We’ll not only have the extra money to have our budget in for 2014, we’ll also be very close to having the extra money to increase our police and fire departments,” Healy. “But we have to be responsible. I have to be able to pay the bills this year.”
Healy said the city “is methodically and strategically growing.” He’ll have a better idea where the city stands at the end of the month.
The city started 2013 with $49.6 million of certified revenue — the projection of dollars it is likely to receive throughout the year — and a $3.5 million carryover from 2012. City Council approved a $52.98 million general operating budget. The general fund pays for the offices of elected officials, police, fire, parks and the Canton Memorial Civic Center.
During the course of the year, if revenue exceeds the original certification, the auditor issues an amended certificate to reflect the additional resources. It is rare for the original certificate to be lowered, though it did occur in 2009 following the banking crisis and resulting recession.
A year ago, Healy warned of major layoffs in the police and fire departments due to the continued reduction of the state-issued Local Government Fund, the elimination of the inheritance tax and previous phasing out of the tangible personal property tax. The city also lost a nearly $2 million federal grant to pay police officers’ salaries.
The city received additional revenue and cut spending to build a carryover last year. It helped offset the projected deficit for 2013. Healy hopes building a similar carryover this year will help balance the books for next year.
Page 2 of 2 - Income tax collections are up 3.7 percent through five months compared to the same period in 2012, however DiRuzza and Healy worry about the impact that the Timken Co. could have on the tax base by moving workers from offices in the city to its research and development center in Jackson Township. Chesapeake Energy is also expected to move roughly 150 employees out of Canton once it opens its new complex in Louisville.
“Income tax collections have been up for the first five months, but we kind of think that’s going to level off and maybe decrease in the second half,” DiRuzza said. “Hopefully something will come in and take it’s place.”
They are also closely watching what lawmakers in Columbus do with the biennial state budget. A proposal to change the formula for how Local Government Funds are disbursed could result in a slight decrease in funding, but Healy notes it would be nowhere near the cuts of recent years. Another bill that aims for uniformity in income tax collections and rates could also hamper the city, Healy said.
Regardless, both say the city is better positioned for the future with the additional funds.
“It’s welcomed news,” DiRuzza said. “It sets us up better for next year.”
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