Toledo officials should have known better

Published August 12, 2015

Toledo officials announced last week they were instituting a hiring freeze, eliminating overtime and cutting discretionary spending and travel — all because of a projected $4 million to 6 million budget shortfall.

But if you look at the budget and other actions by the city, it should have been obvious Toledo’s budgeted revenue for 2015 was too high to start.

First comes the city income tax: a 2.25 percent tax on earnings supposed to generate $169.56 million.

According to The Blade newspaper, this income was the same in 2007, before the recession.

The 2015 budget cites an improved economy and a drop in the unemployment rate as reason for optimism.

But the unemployment rate can be a deceiving percentage.

In 2007, the average unemployment rate was 7.3 percent. By 2014, the average unemployment rate had dropped to 6.9 percent.

Sounds like good news, right?

The reality is that figures used to calculate the unemployment rate tell a much different story.

Data from the Ohio Department of Job and Family Services shows an average of 133,700 people were employed in Toledo in 2007.

By 2014, that number had dropped to 120,000.

With 13,700 fewer people working — and generating income taxes — why would city officials think they’d get the same amount of income tax?

Could it be they thought wages would be higher over the seven-year span?

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Maggie Thurber ([email protected])  is a contributor for Ohio Watchdog. An earlier version of this article was published at Reprinted with permission.