MANSFIELD — Mansfield Finance Director Linn Steward said the city can expect to lose about $1 million in revenue in 2013, due to reductions in local government funds returned from the state, and elimination of the estate tax.
At a budget hearing to introduce a proposed tax budget for next year, Steward said the city will lose those funds because of decisions made at the state level, beyond the control of municipalities. Council is expected to approve the 2013 tax budget at its July 3 meeting.
The proposed figures reviewed by council Tuesday estimated the general fund balance at the start of next year at $2.15 million, down from $2.58 million this year.
Local tax revenues for 2013 are estimated at $15.0 million (up slightly from $14.9 million this year). But state revenues would plummet from $2.66 million this year to $1.61 million next year.
Charges for services would remain the same, at $70,455, but fines, licenses and permits are projected to increase slightly, from $2.08 million to $2.11 million.
Total revenues, including transfers, have been estimated at $21.57 million for 2013, down from $22.53 million this year.
“This could all change by the time we start the appropriations process in the fall. But this is what we know now,” Steward told council.
Mason Mount of Cliffbrook Drive told city officials he is concerned about the proposal in the city’s recently revised fiscal recovery plan to reduce Mansfield’s resident tax credit — the tax break given those who live within the city but work elsewhere — from 1 percent to 0.5 percent.
If the city makes that change, other municipalities will react by making their own adjustments, and some Mansfield residents will move away to live in places with lower income tax rates, Mount said.
“It’s going to be tit for tat,” he said. “What’s going to happen is Mansfield is going to have less revenue, and all the taxpayers will pay more taxes.”
His daughter, Deborah Mount, said she was surprised by state auditor’s estimates which projected only $289,481 annually from the reduction in the resident tax credit.
She suggested the city — which will consider installing one speed camera in a police vehicle — install more than one. That could increase revenues, as an alternative to a tax credit reduction, and could make streets safer, she said.
The proposed 0.25 percent increase in Mansfield’s income tax rate is projected to result in a large surplus in the safety fund in a few years.