BY EARNEST WINSTON
The Cincinnati Enquirer
FLORENCE -- The federal budget isn't the only one with a big surplus.
Florence's good economy during fiscal year 1997-98 left the city with a record budget surplus of $600,000. The big question: What to do with the money?
City officials anticipated collecting about $12.1 million in taxes last year, but strong growth and a healthy economy brought in more than $12.6 million, finance director Ron Epling said Thursday. Most of the money came from payroll and insurance premium taxes. City council is divided over how the money should be spent, and members have asked department heads to prepare a wish list.
"We're going to listen to those presentations in the next few weeks and come to some conclusions regarding the $600,000," Councilman Dale Stephens said Thursday.
"Of course, everybody would like to see a tax decrease, (but) I don't have a good answer for you."
Not all council members want a tax decrease.
"My feeling on the $600,000 is that we would be irresponsible at this point and time to cut taxes," Councilwoman Diane Ewing Whalen said. "I'd hate to see us act hastily."
Mrs. Whalen said the city should wait at least one year to determine what it costs to operate the new public services maintenance garage and the new government center before a lowering of taxes is considered. The largest surplus previously was between $400,000 and $500,000. The problem with trying to predict the amount of money generated annually from taxes is that the city receives the money from most major taxes on a quarterly basis. Also, it's difficult to predict the makeup of the economy, Mr. Epling said.
Mayor Evelyn Kalb noted that the city is developing at a fast pace and suggested that the surplus be used to increase the level of services. The mayor said careful consideration should be given before allocating funds to tax reductions.
The budget surplus comes when the city is poised to set the tax rates for real property and tangible personal property. But Mr. Epling said the two tax rates are unrelated to the surplus. He is recommending a 13-cent decrease in the real property tax rate from $2.11 to $1.98 per $1,000 assessed value. Also, he is proposing to cut the tangible personal property tax rate 51 cents, from $2.66 to $2.15 per $1,000 assessed value.
