The Herald, Sharon, Pa.

Local News

February 5, 2010

UDPATE: Finances are ‘barely positive,’ city manager says

By Courtney L. Anderson

SHARON — After a month on the job, City Manager Tom Lavorini’s got a pretty clear picture of what’s going on financially in Sharon.

“We’re not negative, but we’re barely positive,” Lavorini said of the city’s books.

“We’re very tight, I’m not denying that,” Lavorini said of the city budget. “We are very, very tight.”

The city’s not in the red “yet,” Lavorini said, adding that a tax-anticipation loan is helping to pay the bills until real estate tax revenue starts coming in in the spring.

Central Tax Bureau, the company that collects wage taxes for the city, remits payment to the city a couple times a week, he said.

Lavorini said he gets “almost daily” updates from the city bookkeeper and there are a couple of issues to deal with in getting a true picture of the city’s finances.

Since 2009 was the first year of the increased wage tax in the city, something allowed under the home rule charter as long as real estate taxes are lowered a corresponding amount to make the shift revenue neutral, Lavorini noted that there’s no history to base any revenue assumptions on.

“We’re putting forth effort to correct that, but it’s going to take time,” he said.

Council member Ed Palanski brought up the effort by Lavorini and former Mayor Bob Lucas late last year to adjust revenue projections with estimates taking into account the wage base reflected by Sharon City School District’s accounts, which run on a different fiscal year.

Lavorini said that move should bring projections closer. If it pans out, it should help in developing budgets down the road.

The other problem is that some resident’s employers still are not withholding the entire 2.25 percent wage tax due the city and school, Lavorini said.

An ordinance passed by council last month makes individuals as well as employers responsible for making sure the amount due the city gets paid on a quarterly basis.

Anyone self employed or who doesn’t have the full amount taken out of the paycheck must pay the city four times a year. Those payments are due April 30, July 31, Oct. 31 and Jan. 31.

“There’re going to be a lot of unhappy people,” Palanski said.

Connelly noted that it should mean an influx of cash to city coffers, though.

With cash flow more evened out, it will make for more accurate projections, Lavorini said.

For 2009, officials had projected wage tax revenue of about $2.1 million and Lavorini said that as of the close of the year the city’s gross receipts were $2.13 million, with $500,000 due to other municipalities.

He said it was a “very misleading figure” and that he did not want to say that projections were off that amount at this point due to the withholding issues.

A 1975 city ordinance states the penalty for not complying with city tax law includes a fine of up to $500 and court costs or up to 30 days in jail.



Central Tax Bureau is sending out paperwork that includes quarterly tax returns.



The forms are also available on the city’s Web site at www.cityofsharon.net.

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