When the year started, the city had more than $3.2 million in its general fund carryover — which is comparable to a individual’s savings account — but the expenses of the city have continued to outpace revenue and now that same fund’s balance has dropped to a little more than $2.7 million.
“It’s the classic case of we are spending more than we have coming in right now,” said Finance Director Ted Pileski. “The cuts to the local government fund and repeal of the estate tax are shaping up just like I projected. Obviously, we won’t be able to keep doing that at this rate next year.”
The financial woes are not lost on Mayor Holly Brinda. She said the city has roughly $11 million at risk over the next 18 months, which makes the upcoming income tax renewal in November very important. It accounts for roughly $6 million a year.
Brinda said she will push hard for the renewal because cutting an additional $3 million from the budget — which Pileski would have to do for 2014 if the issue fails in November — is not an option for the city. The tax would continue to be collected through half of 2014 before dropping off the tax rolls.
The city has spent roughly $441,443 more than it brought in through the end of May. At the rate of current spending, Pileski expects to spend more than $1 million of the carryover, which will reduce what is available to be budgeted in 2014.
Brinda is pushing to reduce overtime and rework contracts, and the city budget was cut by more than $1.5 million all in an effort to curb spending more than the city brings in.
The repeal of the estate tax, which is the amount of money the state taxed to inheritances upon the death of a person, is having a huge impact on the Elyria budget. In 2012, the distribution came in two payments totaling more than $939,000. The first check was for more than $400,000. However, this year that first check was a little more than $50,000.
“Eventually that figure will be zero. This is just the last of the estates from persons who died in 2012,” Pileski said.
The city is not getting much help from income tax withholdings. Month to month, May figures are flat although through the first five month of the year there is about a 7 percent increase.
“But I still expect only about a 3 percent increase at best by the end of the year,” Pileski said.
Contact Lisa Roberson at 329-7121 or email@example.com.