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Reynoldsburg eyes cuts after levy fails
Now that Reynoldsburg voters have defeated a 1-percent income tax on the November ballot, it’s back to the drawing board for city officials.
The levy, if passed, would have increased the city’s income tax from 1.5 to 2.5 percent and would have offset expected cuts in state funding. Now, Reynoldsburg officials are looking at what ways the city can meet its 2012 budget.
City officials say an interim budget is expected to pass at the final Reynoldsburg City Council meeting in December.
Reynoldsburg Mayor Brad McCloud said Ohio law permits the city to pass an interim budget as long as a permanent budget is in place by April 1. An interim budget keeps operating expenses at current levels until a permanent budget is in place.
“That additional time will allow us to make some thoughtful decisions as to how we meet this deficit,” he said. “My goal was to do this carefully and thoughtfully, not necessarily quickly.”
Reynoldsburg is looking at a $1.3-million deficit for 2012, he said.
Since the levy was defeated, McCloud has been meeting daily with the city auditor to come up with a list of proposed cuts to help offset the deficit. City officials are exploring every alternative and voters shouldn’t be surprised that cuts are needed, he said.
“We have been open and transparent in our discussions as to the types of things that will happen if the income tax fails,” McCloud said. “Nothing is off of the table.”
McCloud said anytime officials look at reducing the budget, they must look at personnel because it is the most expensive portion of a city’s budget.
“It follows logically that you start looking at your biggest departments, which for our city as in nearly every city, is the police department and parks and recreation,” he said.
City officials already have eliminated some key personnel positions. McCloud has not had a human resources director since the first week of January and the development director left this summer.
McCloud said he didn’t hire a development director because he didn’t want to have to lay someone off if the levy wasn’t approved. Instead, McCloud and the city’s planning and zoning administrator have performed the development director’s duties.
“We do need a development director,” he said. “It is my hope and goal despite the financial crises that we are in I can still hire someone next year.”
McCloud said with the permanent budget not due until April 1, he will have a nice window of time to make critical decisions about the budget and will continue meeting with the auditor, attorney and city council.
City Auditor Richard Harris said April will give city officials enough time to prepare a permanent budget.
“Four weeks or five weeks is just not enough time when you are talking about people’s jobs and eliminating programs that people like,” he said. “We want to be very thoughtful and try to find the best way to do this.”
Reducing expenditures won’t be the only way Reynoldsburg will handle the budget crises, Harris said. City officials are also contemplating some increases in fees for the building department and parks and recreation programs, he said.
In addition to the decrease in local government funding, the city will have to deal with the loss of estate tax revenue, Harris said. The loss of the estate tax is expected to cost the city $250,000 to $300,000 a year beginning in 2013, he said. Earlier this year, state officials approved permanently repealing the estate tax starting Jan. 1, 2013.
Reynoldsburg will see a decrease in local government funding of $150,000 for 2012 and the loss of another $400,000 to $500,000 for 2013, he said.
Reynoldsburg lost $150,000 in local government funding for the second half of 2011 and is projecting another $150,000 loss for the first half of 2012 and $150,000 for the second half of 2012, Harris said.
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