EDITOR’S NOTE: To see a version of this story without the paywall, click on the “Coronavirus” tab in the middle of the home page. To keep the community informed, we’ve lifted the paywall on all stories about the coronavirus.
By DENISE GRANT
“Like throwing darts with a blindfold.”
That’s how Paul Schmelzer, Findlay’s safety director, described trying to gauge the economic impact of the COVID-19 pandemic on the city’s budget.
Findlay’s Income Tax Board met Thursday morning and began talking strategy.
The board oversees the collection of the city’s 1 percent income tax from businesses, payroll withholdings and taxes paid by individuals, like those who are self-employed. The tax is the city’s primary source of income.
Findlay was already bracing for a large projected drop in business tax collections this year.
The city collected $4.4 million in business income taxes last year. Based on current collections, that figure could drop to $2.4 million. Factor in business closings and losses due to the pandemic, and collections could drop to $1.8 million this year, according to Andrew Thomas, city tax administrator. That’s a drop of 58 percent on the year.
Projections show worker payroll withholdings down, too, but only by about 7.3 percent, from a collection of $19.1 million in 2019 to about $17.7 million this year.
Income tax collections from individual taxpayers, however, are still expected to make a slight climb, up about 2 percent over last year. Individual tax collections in 2019 totaled $2.7 million. This year’s collections are now estimated to total $2.8 million.
Overall, income tax collections totaled $26.2 million in 2019. Projections put the collection at $22.3 million this year, a drop of about $3.9 million total.
“We know that this is going to continue to change,” said Mayor Christina Muryn on Thursday.
Muryn said new information keeps coming every day, and the city will work to manage it. City departments have already been told to tighten their budgets due to the drop in tax collections. No changes in city services are expected, she said.
Auditor Jim Staschiak said the loss in revenue will put Findlay’s operating budget into the negative, and the city will begin deficit spending this year. Findlay will need to rely on this year’s $13 million carryover balance to offset the spending. It will be up to council and the administration to decide how and when it will balance the books, he said.
Ohio law prohibits municipalities from operating on deficit budgets.
While the numbers are daunting, most of the board’s discussion on Thursday focused on how the city can best help the economic rebound after the COVID-19 threat has passed.
Muryn has asked the state for localized unemployment numbers. She said the city has a need for workers, and it should work to help get residents back to work.
Staschiak said the “ramp up” will be slow at first. Schmelzer was more optimistic.
Once the federal government passes the economic stimulus package, Schmelzer said city officials should help work to identify what’s available and make sure local businesses are positioned to take advantage of it.
Members of the income tax board include Muryn, Thomas and Staschiak, along with city Treasurer Susan Jo Hite, Law Director Don Rasmussen, and Councilman Jeff Wobser, R-at-large, as chairman of council’s Appropriations Committee.