Toledo last week passed a $251.8 million fiscal 2008 budget after months of debate that centered around how to eliminate a $10 million deficit and on the imposition of a controversial increase in garbage-collection fees.

The budget raises the cost of garbage collection to $7 from $5.50 a month, with exceptions for those who recycle — a move that officials said would raise an additional $4.8 million this year.

The budget comes a month after residents approved the renewal of a 0.75% income tax, which is expected to generate $57.7 million annually. The tax will run through Dec. 31, 2012. Without the income tax, Mayor Carty Finkbeiner had warned that Toledo would be forced to lay off 735 employees in 2009, including 456 police and firemen.

The mayor’s budget includes $254.3 million in expenditures and $253.3 million in revenues. It was based on a 2.5% income tax revenue increase, a roughly 18% increase in property tax revenue, and an assumption that other taxes would be flat through 2008.  

The City Council made several revisions to the budget, including cutting $400,000 from a fund that pays fuel and service for city vehicles,

To help eliminate the $10 million deficit, the city used about half of its nearly $1 million surplus left over from 2007, as well as $262,000 from the Toledo Municipal Court’s un-cashed check fund. Ohio state law states that money collected and not otherwise paid out within five years will be directed to the city’s general fund.

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