BY WALT SCHAEFER
The Cincinnati Enquirer
READING -- While city council has approved a $5.6 million bare-bones general fund budget for next year, there are key issues yet to be resolved that affect future city finances -- and the pocketbooks of residents.
Safety-Service Director Mike Rahall said Thursday that council still must decide on a proposed ordinance to cap spending at 98 percent of the budget. Also, council's service committee is reviewing a proposal to charge for residential garbage collection.
Mr. Rahall said it would cost a resident $5 to $7 a month for garbage, leaf and brush pick-up and mulching if council decides to pass on all of the costs. The service committee is studying the issue.
The $5.6 million budget reflects several years' worth of financial constraints, Mr. Rahall said. Earnings taxes have dwindled over the last five years and are continuing to cause the community of about 12,000 to tighten its belt. The city's estimated 1998 general fund appropriation is $5.8 million.
Mr. Rahall said he expects earnings taxes this year to match the $3.8 million the city received in 1997. "Estate taxes and mayor's court fees are other variables that have impact on the budget," he said.
The city earnings taxes, which make up 65 percent to 70 percent of the budget, dropped from nearly $6 million net in 1992 to about $3.7 million in 1996. That year the city's largest employer, Hoechst Marion Roussel Inc., (HMR) announced it was moving its research arm, with about 350 high-paying jobs, to Somerset, N.J.
Mr. Rahall said if HMR should sell its research lab buildings left vacant by the move, and new jobs materialize there, the financial crunch could be eased.
Mr. Rahall said the spending cap proposal was initiated by Councilmen Ken Norden and Tom Pennekamp as a way to ensure the community will not fall farther in debt, and at least maintain a minimal carry-over into the next year.
The safety-service director voiced concern, however, about how the city would cope with a natural emergency such as storm damage, or replace needed equipment damaged by accident if the cap should be exceeded.
Mr. Pennekamp said he thinks past budgets have used estimates that exceed the amount of revenue actually needed for operations. With the cap, "we try to put a stop to our spending down the (built-in) backlog" of money.
Mr. Pennekamp said the surplus funds already in the budget are adequate to meet emergency needs. "We want (the administration) to operate on a zero-based budget" instead of allotting for a general increase of 2 percent every year, Mr. Pennekamp said.
Should council opt to pass garbage collection costs on to residents, it would generate about $400,000 in revenuewhich, by law, must be maintained in a separate account to cover operation of the service, Mr. Rahall said. The money could not be used to bolster the general fund budget.
The budget -- passed this week by a 6-1 vote with Mr. Norden dissenting -- includes money for 2 percent increases to city employees. Police have approved a contract calling for a 2 percent increase, Mr. Rahall said. Council would be required to approve the increases for other employees and elected officials.
Next year's budget also calls for a "very modest street paving program with $130,000 set aside," Mr. Rahall said.
