Northwood’s Finance Committee discussed the possibility of placing a 0.25 percent income tax hike on the ballot to stem the continuing loss of revenue.
“We talked about a 0.25 percent increase for five years, and possibly put that on the ballot in November,” Councilman Mike Myers said at a council meeting March 11.
The committee also discussed reducing to 50 percent the 100 percent tax credit for residents who work outside the city, he said.
“If the .25 percent passed, that would go away,” said Myers.
Other possibilities included a 10 percent pay cut for the mayor and city council, 3 percent pay cuts for non-union employees, and an adjustment of revenue allocated to the budget, said Myers. Currently, 70 percent of revenue goes into the general budget, 20 percent into capital improvements, and 10 percent for capital repairs. The proposed adjustment would allocate 80 percent of the revenue to the general budget, and 20 percent into capital improvements.
“That would give us a saving of $S720,342 and a carryover of $220,000,” said Myers.
Mayor Mark Stoner told council that the city’s income tax revenues dropped again in March as they did in the first two months of this year.
“Income tax collection for the year to date is $573,736, which is a decrease of $102,261, or 15.9 percent over the same period of 2009,” said Stoner. If income tax collections are down 15 percent by the end of this year, the city would have to cut $697,458 in expenditures from the budget, with $488,221 from the general fund, he said.