2.2.10
Columbus budget increases by 6.7%

Financial crunch eases because of extra income tax
By: Robert Vitalie - www.Dispatch.com
Along with all the political back-patting that typically accompanies a new government budget, Columbus City Council members last night thanked the people paying the bills.

"Each and every Columbus voter should take credit," said Councilman Andrew J. Ginther, praising city residents who backed the August ballot measure that raised local income taxes and pulled the city out of its financial tailspin.

The 2010 budget approved by the council increases spending by 6.7 percent, resumes training for police and fire recruits, restores citywide yard-waste pickup and reopens the doors to shuttered recreation centers.

City government will spend $658.3 million this year from its general fund, the pot that pays for day-to-day operations. The general fund receives three-quarters of the income taxes paid by everyone who earns a paycheck inside the city limits.

And although he was hesitant to declare an end to the city's budget nightmare, Finance Director Paul Rakosky said tax collections jumped 38 percent for Columbus in January. That means that even after accounting for the 25 percent tax-rate increase, more people likely are earning more money than a year ago.

Columbus' tax rate increased from 2 percent to 2.5 percent, which officials expect to add $84.5 million to the general fund. It's partially offset, though, by declines in other revenue sources.

Rakosky said there are other possible reasons for the jump in income-tax collections, such as the different timetables businesses follow for forwarding their employees' taxes to City Hall. But January 2009 collections were down 2.8 percent from the previous January, and the decline set the stage for the biggest one-year drop in city history.

A year after approving a budget that left people in tears at public hearings, council members returned to their tradition of adding money to Mayor Michael B. Coleman's spending plan.

The final general-fund budget is $3.3 million bigger than Coleman proposed in November. Council members were able to add more than $4.7 million in amendments because departments spent less than projected in 2009. Some spending also was shifted from the general fund to other parts of the budget.

The biggest boost over the mayor's proposal went to the Division of Fire, which will receive an additional $2.2 million to resume training for new firefighters.

The council also added money for the Community Shelter Board, arts groups, economic-development initiatives and social-service agencies.

"We've focused on the areas that are very critical to our community," Councilwoman Priscilla R. Tyson said.

The budget leaves $15 million in the city's rainy-day fund as a cushion for future economic downturns. Rakosky also said he is leaving in place belt-tightening policies followed before the tax increase.

He said departments still will need his approval to fill any job vacancies or to submit any spending ordinances to the council. Finance officials also are reviewing all purchase orders of $5,000 or more.

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