City manager says Cincinnati budget problem has worsened - Cincinnati News, FOX19-WXIX TV

City manager says Cincinnati budget problem has worsened

Posted by Trina Edwards - email

CINCINNATI, OH (FOX19) - Cincinnati mayor Mark Mallory and members of city council held a short-notice press conference Friday to discuss the city's budget.

City Manager Milton Dohoney said Friday that the city's revenue has come in lower than expected. Dohoney says the income tax receipts for May and June have been under the projections proscribed by The University of Cincinnati, resulting in a projected deficit of $28 million rather than $20 million for the rest of 2009. The city's funding is dependent on income tax to provide 65% of the general fund budget. 

"Like the rest of the country, the City is experiencing the ripple effects of a bad economy getting worse," said City Manager Dohoney. "Every time a restaurant closes, a business temporarily or permanently reduces staffing, or suppliers close their doors, it impacts our income tax revenue." 

Dohoney says of the City's top 150 taxpayers, 90 have paid less in taxes than this time last year, indicating that either a loss of jobs or wage reductions has occurred.  This amounts to a $3.3 million loss, or 4% reduction for the City.  Approximately 26 of those same employers have not paid taxes (business net profits) through June, but paid them through June of last year, indicating either the businesses have closed, they are not claiming profits, or they are recognizing losses from an accounting standpoint.

Over the past weeks, Dohoney has been meeting with city labor organizations, but none has been willing to accept cost saving days or make commensurate concessions to date.

On Thursday, he issued a memo to all staff instituting cost saving measures such as reducing call center hours, reviewing consultant contracts, and limiting supplies.

The exact plan of the positions to be eliminated will be developed with department directors over the next week or so.

Dohoney explained that doing layoffs in 2009 allows the city to absorb the reduced staffing and service impacts now and prepare for 2010's budget deficit from the very beginning of the year.

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