By Jennifer Edwards
The Cincinnati Enquirer

MIDDLETOWN - City Council is ready to start swinging the budget ax.

Services will be cut across the board if a reduced income tax credit isn't enacted soon, city leaders caution.

In a work session late Monday, City Manager Ron Olson announced that the city faces a projected $4.6 million deficit in the 2004 $49 million operating budget.

Revenue enhancements and service cuts - such as saving $100,000 by shutting down Middletown's two swimming pools - would make up for $3.6 million of the deficit. The other $1.1 million would be met by slashing 12 staff positions, including six police and fire positions, or reducing the income tax credit by half a percentage point, Mayor David Schiavone said.

Cutting public safety positions is not an option he wants to pursue.

"The only choices we have is implement the tax or take the money out of our reserves," he said. "... Either we cut staff or reduce the tax credit."

On Monday, City Council held a first reading of an ordinance establishing a reduced tax credit. A second reading and public comments will be held at the next meeting, Nov. 18.

Council is expected to vote at that session whether to approve the reduced tax credit so it can be adopted by the first of the year.

"Like any other jurisdiction in the city, county, state, everyone is going through a severe budget crunch this year," Schiavone said. "There are a lot of cuts being made across the board in different communities. I actually think we're ahead of the curve on this."

E-mail jedwards@enquirer.com