Unemployment is crippling city's income tax revenue

Report by Colleen Wells - email | bio
Posted by LS

TOLEDO (WTOL) - The city of Toledo is watching unemployment numbers closely because the more people without work, the less money in the city's budget.

If you're working in Toledo, you're paying income tax. As jobs leave, so does that money.

Although business is good at Schmcuker's Diner, worries are growing. "I'm really concerned about the auto industry and the impact it's going to have," says Doug Schmucker, "As I went into 2008 with concerns, they are growing for '09."

Schmucker says most of his customers are Toledo's working class. If they lose their jobs, he loses business. It's something no one wants to see, especially the city of Toledo. It counts on employees to pay income tax, which is a huge money-maker for the city budget.

Council Member George Sarantou says, "As layoffs continue, and unemployment increases, it certainly has an effect on our tax revenue." He chairs the city's finance committee and says Toledo has lost a dramatic 6% of its income tax receipts compared to this time last year. That translates into $3 million. And that's before the November and December numbers are calculated.

"It doesn't seem like a lot. But when you've got a very tight city budget with no extra, $3 million is a huge amount, and you will feel that effect," Sarantou says.

Sarantou expects the income tax money will continue to decrease with the city possibly losing up to $10 million next year. Though he admits that they just don't how much the city will lose. Like Doug Schmucker, no one is sure how far reaching the ripple effects of a slowing economy will be.