Gallipolis commissioners discuss budget

By Dean Wright -

Gallipolis City Commissioners discuss among themselves before getting the budget meeting underway.

Gallipolis City Commissioners discuss among themselves before getting the budget meeting underway.

Dean Wright | Sunday Times-Sentinel

GALLIPOLIS — Gallipolis City Commissioners are pondering a potentially tight budget for the coming year, department requests and the impact of a proposed 1 percent income tax increase on the region.

Commissioners on Thursday asked City Tax Officer Ronnie Lynch how he felt the city would be able to operate in the coming year with the passage of state tax code in what commissioners have been calling House Bill 5. According to Lynch, the new tax codes change the way the city can collect income tax and make it a more confusing venture as the city would be “treading new territory” it had never been in before with new law.

Lynch believes the city could potentially lose nearly $100,000 with the way new codes had been written. Whereas individuals working in the city originally had to file tax papers after working in the municipality after 12 days, now the deadline has been extended with the new code. Employers can also file taxes using a technique called “net loss-carry forward” for which the city previously had not allowed.

Net loss-carry forward is an accounting technique that takes the year’s net operating loss for a business entity and applies it to future years’ gains so one can reduce tax liability. Because of this added technique with House Bill 5’s passage, the city is potentially looking at less revenue. If companies have a negative net operating income in one year but no positive negative net operating income in following years, the business could potentially reduce its tax expense for some of the years by applying a loss seen in the first year.

Lynch noted that a few employers in the area were doing well but that a number were still not hiring and this means no increase in income tax for the city.

City Manager Gene Greene said he feels money must be placed into the “city’s infrastructure.” He said aging equipment would need replaced and he understands that the budget is getting tight. He wants commissioners to take into consideration that without vital equipment such as “snow trucks” that the city’s operation would stop. He cited a 22-year-old truck in the city’s maintenance garage as being a repair liability. He also cited aging police cruisers as being a problem. Greene feels it’s necessary to close some phone contracts of which the city is not using. Greene feels equipment must be bought “on time” so that equipment will not be worn out when it was finally paid off.

Gallipolis Fire Department Keith Elliot asked commissioners to consider changes to volunteer reimbursement policies. Elliot feels equipment is becoming more expensive and that some of the volunteers need an increase in the reimbursement pay to help offset the cost of purchases made. He also informed commissioners that several air bottles will need to be replaced and are “absolutely necessary” equipment in the use of fighting fires. He also noted the importance of purchasing tires for the fire trucks.

Gallipolis Police Chief Jeff Boyer said he mostly wants for the department to have two new fully-outfitted cruisers. Commissioners cited the police budget as being one of the more difficult ones to work with as it is often one of the largest. Boyer expressed a desire to hire more staff in the future but understood budgeting problems. He said the department is operating at “very lean” numbers.

Commissioner Steven Wallis shared Boyer’s concerns and said he hoped residents would consider the 1 percent income tax increase as a possible answer to remedy what might be a cut in services if the city was unable to find a way to meet financial obligations without having to remove employees or equipment.

According to city records, income taxes typically bring in around $1.4 million to the city’s general fund. A 1 percent increase in income tax would potentially generate $2.8 million. The first income tax enacted in the city was legislated in the late 1970s and marked at 1 percent. With the new tax initiative, it would mean residents and individuals working in the city would pay 2 percent of their income.

According to Gallipolis budget records, in 2010, the city had a total general fund of around $4.5 million. The fund in 2015 was around $3.3 million. That is roughly a loss of revenue around $1.1 million over a period of five years.

Voters are anticipated to decide the fate of the income tax issue March 15.

The commission will continue discussing budget concerns at 6 p.m. Feb. 18.

Dean Wright can be reached at (740) 446-2342, Ext. 2103.

Gallipolis City Commissioners discuss among themselves before getting the budget meeting underway. City Commissioners discuss among themselves before getting the budget meeting underway. Dean Wright | Sunday Times-Sentinel

By Dean Wright