Budget battles continue to brew in Toledo, which faces a roughly $20 million deficit stemming from a steep decline in income tax revenue in 2009.

Mayor Carty Finkbeiner has said the city would likely be forced to lay off around 350 employees and implement a number of fee- and tax-raising measures unless unions agree to concessions.

But the City Council has repeatedly refused to take action on most of the mayor’s proposals, and negotiations with police and general employee unions have so far yielded little progress.

On Monday Finkbeiner was hand-delivered a recall notice organized by a group called “Take Back Toledo.” The notice resulted from petitions with more than 40,000 signatures. The Lucas County Board of Elections approved about half of the signatures, enough to put the recall measure on the November ballot, according to reports. Finkbeiner said late Monday that the petitions were not valid.

Last week the mayor sent notices to 234 workers that their last day would likely be May 1. The initial layoffs included 75 police, 17 firemen, and 142 so-called general fund employees. All remaining general fund employees have been told their work weeks would be reduced to 32 hours beginning in May.

“These are not steps I wish to take but they are nonetheless necessary to balance the city of Toledo’s budget,” Finkbeiner said in a statement after sending out the pink slips. “I am again respectfully appealing to our union leaders and City Council to join us in reducing the number of layoffs through revenue enhancements and across-the-board payroll reductions.”

The administration has asked for 10% pay cuts, an end to city contributions to employee pensions, increased trash fees, and the ability to use automated garbage trucks to pick up trash. Another proposal would decrease to 50% from 100% the tax credit given to Toledo residents who work outside the city.

Last week the City Council again postponed taking action on any of the mayor’s measures, including the trash fee increase and payroll tax credit.  Economists have said the city’s income tax revenue would sink to $145 million in 2009, the lowest since 1997. Unemployment in the city has hovered around 13% so far this year.

Toledo’s general obligation debt is rated A3 by Moody’s Investors Service and A by Standard & Poor’s.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.