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Dayton city manager warns of service cuts

Dayton will cut as much as $10 million from budget; no tax issue planned for ballot.

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By Lucas Sullivan, Staff Writer Updated 7:32 AM Wednesday, May 18, 2011

DAYTON — Dayton workers will not face an income tax hike this year, but residents are being told to brace for significant cuts in services.

Dayton City Manager Tim Riordan said Tuesday he will not recommend voters approve an income tax increase, opting instead to cut as much as $10 million by the end of the year.

Riordan said a reduction plan should be in place within the next two months.

The cuts will most likely include job eliminations. Personnel costs account for 68 percent ($105 million) of the city’s $154 million general fund expenditures. There are about 1,200 city workers paid by the general fund.

Riordan refused to speculate how many jobs could be eliminated.

His decision to cut is a clear signal he and a majority of the five-member Commission believe Gov. John Kasich’s budget proposal will pass nearly as is by June 30. Kasich’s proposal to fill a $7.7 billion state budget shortfall calls for cuts to the Local Government Fund (LGF), tax money gathered by the state and paid to local governments, and a quicker phase out and reductions of some business taxes.

That will eliminate more than $9 million in funds to Dayton in the next two years. The LGF is Dayton’s second largest source of income, behind income tax revenue. The city expects to receive about $11.2 million in LGF money by the end of this fiscal year.

Riordan’s decision also comes after numerous area school levies in Dayton-area suburbs were voted down two weeks ago.

“My preference would have been to go for a tax increase but it’s just not going to get done,” Riordan said. “There’s just no support for it.”

The city has considered putting an income tax increase on the ballot each of the last two years. Riordan opted last year instead to raise trash, ambulance, parking and a few other fees to increase revenue. Fee increases are a long-shot option this year, Riordan said.

An income tax increase would generate $10 million annually if it went from 2.25 percent to 2.5 percent and $20 million if raised to 2.75 percent. Only city residents could vote on a tax increase, but people who work in the city pay the tax. A little less than half of the city’s estimated 113,657 workers live outside the city, according to 2000 U.S. Census data. New census data on employees has not yet been released.

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